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What Is Retirement?…
So, what’s this retirement business all about then?  I guess it means different things to different people but, to me, it means FINANCIAL INDEPENDENCE!:

  • You wake up one morning and you’ve got an ever so slight smug smile on your face.
  • You don’t have to go to work. In fact, you never have to work again!
  • So you decide to (insert your hobbies / interests / dreams!).
  • You’re not thinking about emails, workloads, colleagues you don’t even like.
  • Within reason, you can do whatever you want, whenever you want to.
  • You’re financially secure and you never have to worry about running out of money.

That’s what I mean by financial independence.  Actually, as I’m writing this, I can feel how exciting that thought is!  For most of us, this is surely a dream that’s worth chasing and I love helping people achieve it.

But Where Do You Start?…
Very good question.  Well, first things first, you need to buy in to the idea that financial freedom is something you want.  I know that sounds strange but you’d be surprised how scary that thought is for some people.  To many people, not having work feels like going through life with no net.

You’ve always been in control in your life (well, to the extent that anyone can REALLY be in control).  You’ve made some good decisions and some not so good decisions but you’re where you are now through your own merit and effort (and, possibly, a slice of luck along the way).

The idea of putting that at risk by not working isn’t appealing for a lot of people but I urge you to have faith.  If you follow the process I’m about to talk about, you’ll be well placed to overcome some of these very legitimate fears.

The Boring Bit…
So, let’s assume you want FINANCIAL INDEPENDENCE.  Let’s assume you’ve decided you can ‘go it alone’.  What do you need to do to make it work?

Pour a glass of something and sit down with your best friends (your bank and credit card statements!).  Get to know your spending.  Understand why you don’t seem to have as much money at the end of the month as you think you should.

It’s really important that you’re realistic.  Don’t worry if you discover you’re spending ‘too much’.  I find that most people do once they’ve done this exercise but that’s OK.  We’re talking about planning for the rest of your life so it’s important to be truthful to yourself.

Now, once you’ve understood what you’re spending now, take some time to picture in your mind what a life of financial independence will look like.  What will you do?  Where will you live?  How much do you think it will cost?

Get a clear(ish) idea of what you think life will cost in the future.  Again, be realistic and be honest.  These are only ever going to be ‘best guesses’ but it’s important to write them down and make some sort of mental commitment to them.

Have You Got Enough?…
Once you’ve done this exercise, you then need to understand what future inflows you’re going to get.  This will be things like your state pension and any final salary pensions you might have through work (current or previous).  Income that you know you can rely on.  Really important income!

So, by now, hopefully you’ve got a good idea of what life will cost you in the future and you’re also clear on what future inflows you can expect to get.  This should tell you if there’s going to be any gaps.  Chances are there will be.  Chances are your future inflows aren’t going to be enough.

So, what do you do then?  Well, the next part of the process is to look at all your resources.  By this, I mean your savings, your investments, your pensions.  Liquid money that’s available to you to spend.  It could also include the proceeds from you downsizing your house or selling a business.

These resources are all the same to me.  By that, I mean they exist to provide a life for you.  They exist to help you become FINANCIALLY INDEPENDENT!  It’s these resources that you’re going to rely on to fill the gap between the cost of your future life and your future inflows.

What we need to do is look at these resources and make some assumptions on how they’re going to grow in the future.  Yes, this is the technical bit where you might need some help but it’s not that hard, I promise!

The idea is that all your other money (what you’ve got now and what might become available in the future) would be used to cover any gaps between the cost of your future life and your future inflows.  When we know this, you’ll know where you stand.

Dream or Reality?
Will your money run out?  I don’t know, but, after following the process I’ve just talked about, you’ll know, pretty much for sure, if it will or not.  You’ll know how close financial independence is for you.  The news may not be good, but at least you’ll know!

On the other hand, you might find that you’ve got more than enough.  You already ARE financially independent.  Now you have some big decisions to make.  Do you take the plunge and live life after work with confidence and excitement or do you continue to need the crutch of work?

Even if financial independence is still out of reach, there are things you can do to bring it closer.  This might be:

  • Setting your future life a bit lower.
  • Putting more money aside each month (you now know if you can afford to!)
  • Working for longer (and having a shorter ‘financially independent’ life as a result).
  • Rob a bank (joking!).

The important thing is that YOU KNOW!  You know if you can and you know if you can’t.  That in itself is a great position to be in.  A position of knowledge, from which, you can start making some meaningful decisions about the next phase of your life.

This is what we help our clients with all the time.  This is why I’m in business.  To help our clients live the lives they want without ever worrying about running out of money.  It’s important work and it has a positive impact on the lives of our clients, regardless of what the outcome is.

Go for It?…
Even if you think retirement is a million miles away, you can still do this exercise.  Even if you’re already retired, you can still do this exercise.  EVERYONE should do this exercise!  It brings clarity to your thinking and should give you tons more confidence about what your future might look like.

I don’t write these blogs to sell.  I write them to inform.  There’s a difference.  That said, this is such an important issue.  If you feel you’d like to talk further about it, ping me an email and I’d be happy to have a chat (

Take care for now!…