Know Your Numbers part 3
Your Retirement Number
Do you know how much money you need in retirement?
Do you know when you can afford to retire?
Have you not thought about it?
Have you just ‘thought’ I’ll retire at 60, 65, 70 whatever age you’ve thought of?
How did you decide on ‘that’ number?
Most people reading this or asked those questions, especially if they’re aged under 40 won’t have planned retirement in this much detail.
In fact many over 40 haven’t done it!
Why not? This seems crazy to me, especially as I’ve repeatedly done this exercise over the past few years and feel so much better because of it, even it’s a reminder that I can always do more.
Clarity and peace of mind that comes from knowing when you can retire and how much money you will need in retirement.
The clarity and peace of mind from knowing that your business is able to fund your retirement plan 100% through pension contributions, property or investment income and perhaps a business sale or transfer of ownership in the future.
The more detailed your plan the more accurate it will be. Your lifestyle and spending habits at 60 will be very different to 80 or 90, so make sure plan for this.
As I’ve said, this is an exercise I’ve completed and I recommend that all our team and our clients do the same.
So how do you start planning for this?
First step should be to look at your personal spending now, which we covered off in Know Your Numbers part 1.
Once you know your personal numbers now, you can start in forecast what your personal spending habits will be in the future.
The second step is understanding your business numbers – see Know Your Numbers part 2.
Knowing how much profit your business needs to generate to provide you with the money you need for your current and future lifestyle.
Once you have these two steps in place you can plan for retirement with more certainty.
You will see how much more you need to invest for your retirement.
You may be right on track.
Maybe you’ll realise you can afford to retire earlier than you thought!
We covered this in more detail in our Know Your Numbers webinar.
Whichever stage you’re at, just knowing where you are will give you clarity.
Add to that peace of mind – even if that’s knowing how much more you need to start investing into your future retirement plan.
The result being you’ll be more relaxed about the future.
Knowing that the financial planning for our future is on track means we’re less stressed and can enjoy time away from the business much more.
This is especially important now – summer 2021 as restrictions are being lifted and we get the chance to spend quality time with friends and family.
If you’d like a free 30 minute meeting to discuss how we can help you run the business you want so you can have clarity and peace of mind, please get in touch.