This month it’s time for the latest in our series of age related articles – welcome to the world of the sixty-somethings! As you (potentially) approach the end of your working life, you are at a really important stage in your financial life. We hope to give you some food for thought to ensure you make the wisest financial decisions to see you through the next phase of your life.

Plan carefully for the end of your working life

It is really important that you are getting the best financial advice at this stage – there are so many significant decisions that need to be taken. You want to work with somebody who can confidently confirm to you the lifestyle that you can afford into the future, who can help you plan your financial life for the rest of your life.

Your adviser needs to have their finger on the pulse too in relation to all of the pension related opportunities that are available for you – maximising tax-free cash opportunities, carefully planning your post-retirement strategy and deeply understanding the various tax reliefs that are available to you. The days of saving until you’re 65 and then buying a fixed income for the rest of your life are long gone. Now is the time to start thinking about managing your pot of money wisely until the day that you die.

Of course if you are a business owner, you need to have clear line of sight of your exit strategy and how you will generate the maximum personal value from your exit from the business.

Keep saving while you’re earning

Now is not the time to ease off on your savings, instead you need to put your foot to the floor! Your expenses have probably reduced – your mortgage hopefully is in the past, the kids are educated and have moved out and you have more spare cash.

Remember your time horizon for saving is no longer age 65, it’s until you die. So the more you save now, the better your lifestyle will be later in life.

Review your investment strategy carefully

In the past when your time horizon was age 65, it used to be all about having everything in cash or other low risk assets at this stage. Now that people are financially planning into their 80’s and 90’s (and beyond), your time horizon is longer and your investment strategy needs to reflect that. We will always carefully consider your total investment timeframe before carefully constructing your investment portfolio for you.

An example of such a strategy that some people consider is an investment “glide path”. Instead of putting all of your money into low risk assets as before, some use a rule of thumb of keeping “age 100 minus your current age” in equities. So, a 65 year old would have 35% of their investments in equities. While such rules of thumb are useful, we will always look at your individual circumstances, your own specific attitude to risk and all of your available assets in deciding what’s right for you.

Know your current (& likely future) expenses

As the days of earning income draws towards a close, a significant factor that will impact your future wealth is your expenditure. Now is the time to get crystal clear on what you spend. So actively track your spending, know how much you’re going to need in the future to live the life that you want. Then we can demonstrate to you everything that is financially achievable for you for the rest of your life.

Keep your emergency fund full and protection in place

There can sometimes be a temptation to think that you’ve cleared all the hurdles and can now just start spending your hard-won savings. Unfortunately things can go wrong at any stage in life. That emergency fund that you had built up is still really important to see you through any significant bumps in the road.

Your life cover and specified illness cover are also still very important. You may not need as much cover as before, but you still need to protect your loved ones and yourself against future disasters. And it’s a fact of life that you’re also more likely to claim at this stage in your life too…

Think about future work (seriously!)

We suggest that you look at future work opportunities too. However you will be doing this as much for the mental wellbeing benefits as for the actual financial benefits. And you will only look at work on terms that suit you – doing work that you like, in a location that is easy for you and where the work hours really fit around the rest of your life. Work at this stage should be a source of enjoyment, not a chore!

As the world of work draws towards an end, you still hopefully have a very long life in front of you. So it is really important that you retain a long-term view of your finances and get really good advice in doing so. And that’s why we’re here. We want to guide you to allow you live the very best life that you can lead, for the rest of your days.

A conversation that often arises with clients is around how much is enough. Everyone is different and has unique wants and needs in life, most of which come with a financial price tag. If someone could wave a magic wand and guarantee each of your wants and needs in life, would that be enough for you?

This all might sound a bit philosophical, but really that’s only because we’re not programmed to naturally think this way in relation to our finances and our investments. Instead, people fret about the size of their pension fund, whether their particular investment fund is going to deliver the very best possible outcomes or what they will do if their pension contributions bring them up to the €2m Standard Fund Threshold (yes, people lie awake thinking about this). We worry about growing our money as much as possible, about making use of every cent of available tax relief and working until our late 60’s to accumulate as much wealth as possible.

For what?

Because thankfully quite infrequently, we have other much more difficult conversations with clients. These are the conversations where a client is seriously ill, and their prognosis is poor. While these conversations with us of course are about money, the real focus of the conversation is about time. This is the most precious resource to these people, and one that money unfortunately cannot buy.

These are the conversations that jolt us back to considering both for ourselves and our clients the importance of recognising how much is enough. These conversations remind us that whether we have €500,000 or €600,000 in our investment fund or even whether we have €5million or €6 million is somewhat irrelevant. Target wealth levels to make one feel better don’t really matter, as once you achieve that number, you’ll likely just want to achieve a higher number. Instead, if you fully determine and articulate the life that you want to live and all of the things you want to do, surely if you have enough money to achieve these, that is enough? We read a piece recently that quoted an interview on CNBC with the billionaire Warren Buffett who said he would be very happy with €100,000 a year. That is enough to fulfil his wants and needs. Another legendary investor, Jack Bogle once said that enough is one dollar more than you need.

We’re not suggesting for one moment that achieving the best investment outcomes etc. is not important – of course it is. But it is only a means to an end, and the goal should be ensuring you have enough to live life on your terms. Once you realise that you have enough, this liberates you in so many ways. You don’t have to worry about money, maybe you don’t have to work anymore, even though you might choose to for other reasons. Now you can spend your time doing the things you want to do, safe in the knowledge that you have enough money to live your life. This is true financial freedom.

Going back to our difficult conversations with ill clients, they never wish they had worked longer, had made more money or had more money in the bank (beyond providing for their family after their death). Instead, any regrets tend to be around wishing they has worked less, had spent more time with the people they love and had more experiences in the memory bank.

By the way, these conversations with ill clients are not always regretful! While sad, they are often the most uplifting conversations that we have the honour of being privy to. We hear people who lived full lives surrounded by the people they love, did the things they wanted to do and who are leaving strong legacies after them. While they might be running out of time, they left it all out on the pitch and have no regrets. “Enough” instead of “More” was their guiding North Star and that was how they lived their life.

How much is enough for you?