If like me you enjoy doing what you do, you may not ask yourself this question too often.
Retirement means different things to different people.
For some it is a complete stop to work; never having to go back to the office,shop or factory.
No longer having to put up with a nagging boss or work shy colleagues!
And yet still having enough money not just to pay the bills but to do all those things that you want to do but simply never had the time to do – perhaps because work got in the way!
I had a lovely meeting with a client yesterday and he had a massive amount of satisfaction in his voice as he told me he had now given up work completely and could spend as much time as we wanted to on the golf course and in his garden.
So when will you be able to retire? There are really two sides to this question.
At the most simple it could be rephrased as “when can I access my pension fund?”
But perhaps that is over simplistic. You may be able to access your pension funds from age 55 but that may not allow you to retire at all.
The real question if rephrased is probably when will I have enough money to retire?
That is a more telling question because it forces you to think about your retirement income needs.
How much is enough? And retirement isn’t just about pension plans it is about the totality of your financial resources, pension plans, investments and savings and of course income from whatever sources.
If you have planned your financial life well you might have reached the point where you have paid off your mortgage if you had one.
You might be doubly lucky and have educated your children so that they have secured well paid employment and no longer see you as the “Bank of Mum and Dad”.
So how much income do you need to pay the bills each year into the future and have sufficient cash available to do the enjoyable things as well?
Everyone has their own number; the amount they need to accumulate to generate sustainable income in the future. So to answer the question is really the establishment of an income figure.
Once you have sufficient financial assets to be able to generate that income then the answer becomes self evident – I can retire now!
So this week’s question to ask yourself is – when will you be able to afford to retire?
