Many people, especially those of the baby boomers generation, want to work less and live more. They want to ease back; not exactly retire but to make time available to do the things that they have always wanted to do (but never really had time for).
They want to start enjoying some good summers. To do this they have to rearrange their finances. In particular they need to set a whole new investment strategy because they will be reliant on their investment capital to some extent at least to give them the income on which to live.
Getting ready to ease back into semi-retirement means doing three things:
1. Calculate how much you need
Most people are rightly concerned that their money will run out before they do.
There are seven factors that you need to take into account when calculating how much you need: your lifestyle, your house, inheritances, work, your age, other income and expected investment returns.
You may need less than you think! If you do have enough, get on and enjoy life to the full! If you do not yet have enough, calculate how much you need and set that as your main financial goal. We call this amount your “freedom figure”.
2. Plan your investments (get advice)
When you start to live on your capital, your investment strategy may change: instead of wanting to grow your capital you want income from your investments. This will mean a new investment plan for which you will probably need some professional advice.
3. Plan succession (get advice)
How we leave our assets to our families is important to most of us. It is important that your Will and/or Trust arrangements are up to date and reflect your wishes. This is another area where you should seek advice.
For a lot of us it’s time to stop saying that you will do things “one day”. Time is getting on and if you have always wanted to travel to Mongolia, sail around the Pacific, spend more time with grandchildren, learn to fly fish or get the golf handicap down to single figures, now is the time.
Rearrange your finances and get on and enjoy your summers!