DON'T RETIRE until you can answer these 3 QUESTIONS

#retirementplanning #retirement #pension #personalfinance
I speak to people every day who want to consider retiring. There are 3 key questions I think you need to answer BEFORE you do that.
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A BORING BUT IMPORTANT DISCLAIMER:
This channel provides information on general financial planning. It is for educational purposes only and does not constitute financial advice. The information based is believed to be accurate and currently however should not be solely relied upon. Unless you take regulated financial advice only YOU are responsible for your own decisions therefore we cannot be responsible for any action or inaction you take. Please take advice specific to you before making any decisions. Principles Personal Finance is an educational channel and is not affiliated with my employer. As such views are stated are individual and should be seen as such.
Investment involves risks. The investment return and principal value of an investment may fluctuate so that an investor's portfolio, when redeemed, may be worth more or less than its original value. Past performance is no guarantee of future results. The information provided in this presentation has been compiled from sources believed to be reliable and current, but accuracy should be placed in the context of the underlying assumptions.
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There are some scams on KZbin where a profile image is copied and then used to promote cryptocurrency scams and all that nonsense. I will never, ever, contact you selling any investment product or service. I would never do that, am not allowed by regulation and it goes against the intention of this channel to educate and inform.

[@Kalarandir]

I loved the idea of retiring at 60 until I was forced into home seclusion during lockdown. I thought I had had enough. Now I realise that days, weeks and months of doing what I enjoyed eventually sucked the enjoyment of them. So now I will be looking at slowing down over the years rather than cutting adrift.

[@PrinciplesPersonalFinance]

Such an important point, contrast is key. Glad to hear slowing down worked well for you. Thank you for watching! 🙏

[@user-qc5hd1km7m]

Sad

[@gregoryflot7650]

I feel your pain mate, It's always good to have a financial plan, I work with a portfolio manager and fixed income planner in the US. The fixed income serves as a buffer for the volatility of the equity and also bring legitimate returns.

[@gregorridavichko]

indeed, most people downplay the roles of financial planners until burnt by there mistakes. Productivity is optimized and keeping up to date strategies and analysis makes it more lucrative. I've been able to navigate the volatilities and scaled up 880k from 220k with professional guidance.

[@bernardsegouin6773]

I completely agree with you considering the market sentiments and volatility . An expert is essential for a lucrative planning for retirement

[@nokchilton1562]

Thank you for your content!

[@PrinciplesPersonalFinance]

My pleasure! Thanks for watching 🙌

[@DeeCee-nb6ev]

What never seems to be covered by the majority of financial planners are manual workers, those who do physical hard graft, not everyone works in an office. By the age of 60 a significant proportion of manual workers are literally worn out and just about all cannot work at a similar pace to when they were in their 20’s, 30’s or 40’s, by your 50’s you are at least beginning to have had enough of hard graft. Manual workers as well tend to earn less and have smaller pension pots, a significant amount do not even have a private pension, particularly women. Sometimes you do not have a choice when your a manual worker as your worn out physically and / or ended up with health problems and have no choice but to retire.

[@marissakeynes2532]

So true. My partner is a 49 yo builder and he's already worn out. What he charges gets eaten up by labour and material costs. At the end of the job he doesn't have much left over and to add insult to injury some customers don't pay. So to save into a pension is wishful thinking.

[@nicobass1966]

I like this one. I'm approaching 58 and looking at retiring at 60 with I think will be a decent pot, although looking at working part time as I've thought it's a nice thought to have all this time on your hands but I think retirement needs to be phased, great content, thank you

[@PrinciplesPersonalFinance]

It's a tricky one, for many a 'full stop' retirement can work but it can be a bit of a shock for some. Definitely an area to think carefully about. All the best for your phased retirement and thank you for your support. 🙌

[@rabihah4119]

Great content. Thank you George! Tough questions for me to consider as I approach retirement

[@PrinciplesPersonalFinance]

Thank you! Very grateful for your support! 🙌 Wish you all the best for your retirement planning.

[@DKNW62]

Great video George very relevant, a problem I have is that decision point, many of the things you mentioned are fulfilled by work, and it often does not make sense to do something similar for no money, so you end up in a loop keeping you in work. For sure your right you need to replace that meaning and purpose somehow, but I also worry about keep kicking the can down the road and potentially leaving it too late. I guess what we need are some positive examples and experiences. Slowing down or part time seems a good idea.

[@PrinciplesPersonalFinance]

Thanks for watching. It's tough and there are definitely no clear-cut rules here. I've had similar situations with clients where they've started to reduce hours, or just in general started to work in a more flexible way. It's highly individual to circumstances but often employers can be receptive to it when faced with being flexible, or you consider retiring/losing you fully. Wish you all the best for your planning! 🙌

[@FlyingFun.]

Most people I know don't enjoy retirment as much as they thought they would and IMHO should just reduce their hours or do something like consulting for the company they worked for if that is a possibility. I personally retired at 42 after beign self enployed for 20 years, my back was shot and the work was drying up and the skills were not really transferable so not much choice I knew it was coming though right from the start so I saved and invested pretty hard, However I did have hobbies etc and even make a little bit of money through those hobbies. But thanks to covid and the massive money printing machine that has driven inflation higher and higher I now find myself with not enough reserves to see me through retirement comfortably so will be looking to go back to work of some sort. So staying flexible and having a useful skill is always a good idea because you never know whats around the corner.

[@PrinciplesPersonalFinance]

Salient point 👍 always worth considering how things may change

[@mwscuba]

I’m looking to retire at 55 in a few years time. 😊can’t wait

[@PrinciplesPersonalFinance]

Good on you! Wish you the best for it. Thanks for watching 🙌

[@stevegeek]

Nice analysis. I don’t think my lifestyle when I’m 80 will be the same as when I’m 60, so probably the model is over-simplified, but it’s good to err on the side of caution.

[@PrinciplesPersonalFinance]

Thanks for watching, Absolutely it's right to consider the decline in spending and how that may change of retirement. My overly simple bit of a run-through did not consider that but any proper retirement planning definitely should 👍

[@clivedyer17]

The videos are excellent and up there with the best around. Personally i think i would like to continue working part time, but how many people want to employ a 64 year old?

[@PrinciplesPersonalFinance]

Thank you, grateful for you watching and your kind words. I wouldn't say people won't want to hire a 64-year-old. A lot of workplaces are crying out for a bit of experience and maturity in the workforce! There's a book called '100 year life' which talks about how retirement in the next few decades will completely change in concept. Can imagine there will be a lot of people working later.

[@AndrewDCDrummond]

It’s simple, downsize to an old house and then you will never have any spare time to do much else other than house maintenance 🤣 For extra fun rebuild the rotted decking area and install a new summerhouse, then try to make it weather proof. Although that does suck up a lot of money 😩

[@PrinciplesPersonalFinance]

🙃 I have family who have retired with a similar strategy. They are very happy to be fair! Thanks for watching.

[@george6977]

👍

[@sobobwas6871]

My dilemma is that stopping means the end. I can earn very solid daily freelance rates and enjoy work but I have realised that by working freelance I am still very much part of the ratrace as I am beholden to that work around which everything else has to be organised. I did give up for 6 months at 58 but felt that I am too young. Taking the leap into actually drawing down on savings and pensions seems the point of no return and is quite scary.

[@PrinciplesPersonalFinance]

That's a really interesting point. I'm often speaking with clients about similar situations like this. The dilemma of leaving the working environment to start drawing from savings is daunting for many, so it's definitely not just you! From what you've said, could partitioning your working months in a year where you work freelance and setting boundaries there help give some control? So instead of a 'full stop' and drawing down on assets. Acknowledge that from January - April and September - December (for example) you're beholden to a freelance schedule BUT you have complete autonomy in the other months? I acknowledge I have no idea how your industry works or if the finances are feasible! 🙃 Some clients I have operate in their businesses on more of a 'lifestyle' basis like that. Wish you well for all your planning. 👍

[@sobobwas6871]

@@PrinciplesPersonalFinance yep, that is my concession at the moment, june, july, august and December off and pretty much full blast for the rest of the year. Still contributing to a pension and not dipping into savings. Will have to make the big decision some day. Have played out many scenarios re slowing down thanks

[@albedo0point39]

Seligman’s book ‘Authentic Happiness’ is excellent - an essential read.

[@PrinciplesPersonalFinance]

Thanks, I'll check it out!

[@cooper8t]

Great video. I do have a question about your inflation assumptions during retirement. Is an average retirement inflation rate slightly below CPI? 3% just seems a bit too high, maybe average inflation minus 0.5% or even 1% over a thirty year period?

[@Desmond.TuTu.]

3.2% is what I’ve been made to believe, for average inflation.

[@cooper8t]

@@Desmond.TuTu. So if 3.2% is a solid long term average inflation rate, for someone retiring assuming 2.5% is probably very sensible?

[@PrinciplesPersonalFinance]

Thank you! Appreciate you watching and taking the time to comment! 🙏 Typically we use 2.5% for cash flow models with clients (although there are inflation stress tests also built-in) so I agree with what I showed here that 3% may be a bit generous. The key relationship with any modelling is not necessarily that of inflation but the contrast between inflation and growth rates. So, getting those assumptions as accurate as possible with deterministic modelling is the most important element. To be a nerd (as you would expect!) 🙃 From a historic perspective between 1900 and 2021 in the USA, annualised inflation was 2.9% per year, versus 3.6% in the UK. What it will be going forward 🤷‍♂️

[@TheSilvercue]

The facts for me are… I simply can’t retire when I want and I will never have enough!

[@PrinciplesPersonalFinance]

I'm sorry to hear that. These are very tough times and retiring isn't on the cards for a lot of people right now. The fact that you are watching personal finance content puts you ahead of SO many who never engage with this stuff. Don't get distracted by many who may be ahead right now, the race is only with yourself. I don't know your situation but I can say first-hand that I've seen many transform their finances from small steps over time. Keep the faith and wish you the best!

[@davidfolts5893]

Thanks, George, for another outstanding financial KZbin video!

[@PrinciplesPersonalFinance]

Thanks David, as ever your support means a lot. Appreciate you've been here from the start. 🙌

[@davidfolts5893]

@@PrinciplesPersonalFinance Keep that unique creativity coming, George.

[@joed285]

I am 52 hoping to retire at 58 more realistically will be 60 would you give me a pension review , how do I contact you , Subscriber , Joe.

[@PrinciplesPersonalFinance]

Thanks for watching, grateful for the support. There are a few details on my educational site of who I best serve and what the advice process is like. 👇 www.principlespersonalfinance.co.uk/work-with-me From there you can either follow the links to book in if it seems like it may be something you'd like to discuss in more detail. 👍

[@tonytoo9999]

Good that you’re not focusing solely on finances. It is something that concerns me as finances are ready, but not what I’ll do 7 days a week for the rest of my life. I can recommend another KZbinr @AzulWells (American, so you need to ignore the Roth stuff etc) but he also covers psychology, including why we should retire.

[@PrinciplesPersonalFinance]

Thank you 🙏 appreciate you watching and yes, it's finding purpose during retirement which is often the most important bit!