Sometimes when the mass says keep

working, you need to stop listening to

the mass. I'm a financial planner and

over the years I've sat across the table

from dozens of people who wanted to

retire, but they couldn't quite bring

themselves to push the button. Probably

people just like you. And almost all of

them were looking for that final bit of

confidence in exactly the wrong place.

Let me let me show you what I mean. A

few years ago, I was approached by a

couple, Dan and Fra, who at the time

were in their late 50s, and they wanted

my help establishing if they could

afford to retire. Between them, they had

a little over £600,000 split across

pensions and ISIS and about £30,000 in

cash. Now, if you're looking at those

numbers and thinking, "Wow, that's way

more money than I'm ever likely to have,

or way less for that matter," stay with

me because the lessons from Dan and

Fra's story have nothing to do with the

amount of money they have. I've had

almost identical conversations with

people who have half that amount and

people who have five times as much. Now,

they had done a lot of homework. They

knew that they wanted to spend about

£45,000 per year in retirement, and they

were confident in that because they'd

actually already tried living on that

budget, and they'd not found it too

restrictive. Beyond their day-to-day

living, they had detailed plans for a

few of the big trips that they wanted to

do right at the start of retirement. For

example, if Dan was absolutely mad about

cycling and he wanted to spend half a

summer in France following the tour to

France. We also discussed their plans

for their kids and how they wanted to

support them in the future, helping them

onto the property ladder if they can

afford to do so and also a budget for

their daughter's wedding. To be honest,

like they were way more prepared than

most people that I start working with.

So the next step was to enter all of

their data, their assets, their goals

into our financial modeling software to

investigate how sustainable this plan

might be. They had two different

scenarios that they wanted to test. The

first one was looking at what would

happen if they retired in a year's time,

which is what you can see here, and then

another looking at the effects of

working one more year. This purple line

here represents their liquid assets. So

that's their pensions, their IS cash.

It's basically everything other than

property and then how that is projected

to grow or decumulate as they draw down

from these assets through retirement.

We've made conservative assumptions for

investment growth and future inflation

and the software takes care of things

like tax. You can see how initially the

line drops away fairly steeply, but that

plateaus once their state pensions come

online and they reduce their spending in

later life until we get to LTC, which

stands for long-term care. care is the

real lottery of later life. Some people

they don't need it, but some people do

and it can cost an eyewatering amount of

money. It's absolutely ridiculous. So,

any good financial plan should have a

provision for this. You've got to

understand where this is going to come

from if you need it. So, here we've

assumed £68,000 per year per person. And

this is an assumption based on where

they live. And you can see how quickly

this wipes them out. However, it's not

as bad as it seems as they would still

have equity in their home and we'd

already discussed that if it came to it,

they'd be happy to dip in and pay for

their care from from equity within their

home, especially if they've already

helped their children get onto the

property land, too. Now, the most

fascinating part about these meetings, I

guess at least from my perspective, is

seeing clients initial reactions when

they see this stuff for the first time.

And I actually went back and watched the

recording of this meeting last week and

you can see how on seeing this

immediately Freya lights up. She's got a

big smile on her face. She's saying how

encouraging this is. She honestly

thought that they were going to be in a

much worse position. But then on the

other hand, you got Dan who's sitting

there quietly, not really giving much

away, sort of sitting there with his

arms crossed. And clearly something

didn't sit right with him. And he just

then asked me, "Okay, let's just have a

look at the next scenario. What if we

push retirement back by one year?" And

if they did that at the age of 85,

they'd be projected to be £200,000

better off. And that's in today's terms,

which took them both by complete

surprise. They didn't understand how a

single year could make such a big

difference. But it's pretty simple if

you think about it. They'd recently paid

off their mortgage and were plowing

everything that they could spare into

their pension, saving about £40,000 per

year. And given that they were also

planning on spending £45,000 per year at

the start of retirement for every extra

year they were, for every year that they

push back to retirement, that's an extra

£40,000 of saving and £45,000 of

spending that they're avoiding, which

leaves them about £85,000 better off at

the start of retirement. That money then

gets to remain invested and keep

compounding for the best part of 30

years, which could add up to a hell of a

lot. Now, Dan still wasn't being

particularly forthcoming. So, I asked

him, "What are you thinking?" And he

said, "Well, clearly that is a lot of

money for just an extra year of work."

His initial read of this was, "The math

says we should keep working." And when

he phrased it like that, just one more

year of work, it does sound so easy.

What's another year of work when you've

already done 30? But here's the thing.

It's not just another year. Dan and

Freya are 58 and 57. They eat well. They

exercise. They're otherwise in good

shape. But let's be realistic. How many

years do they have left together when

they're both going to be fit and

healthy? Let's say 15. How many of those

years will they have the energy and

desire to go out there, travel, and do

some of the more ambitious things that

they've got planned? Maybe 10. And how

many of those years are then going to be

absent the need to be close to home to

look after their own parents as they get

old? Seven, maybe eight.

Eight summers left together. If Dan

wants to fulfill his dream of following

the tour of France, he may only have

eight opportunities left to do that.

Seven if you consider the fact that it's

probably going to take a while to plan.

So this isn't just one more year. This

could be a big chunk of what they have

left of the prime years of their lives.

So, if they're going to trade that away,

it's got to be for something meaningful.

The mass of working one more year is

undeniable. £85,000, it's a lot of money

to have at the start of retirement. But

what does that money actually mean? So,

I asked them, "What would you do with,

say, an extra £500 a month to spend?"

Now, many people can't even attempt to

answer that question because they don't

even have a good enough understanding of

what spending £3,750 a month would mean.

So, adding £500 to that is just

meaningless. But Dan and Fred, they'd

done their homework. So, they knew

exactly what was in their budget, what

it had provided for, the contingencies,

they'd even lived on it, and it already

had everything in it. So they just joked

that, okay, maybe Freya could treat

herself to a massage every now and again

and that they could stay in perhaps

slightly nicer places when they

traveled. But when I pushed them on

that, would that actually improve your

quality of life in any meaningful way?

They were just like, "Yeah, no,

honestly, it wouldn't. Not really." But

then Dan said something that revealed

what was actually holding him back. A

big part of him wanted to retire and

seeing how close they were was obviously

really encouraging, but another part of

him was just concerned about the risks.

To put this into context, this meeting

happened in early 2023. There was the

Russia Ukraine war was still in the

headlines daily with the everpresent

threat that you that could escalate into

more of a broader conflict. Inflation

was coming down, but it was still high.

I think it was close to 8% at that time.

And there was the stock market hadn't

fully recovered from the tech seller for

2022. So Dan said, "The world just feels

more uncertain than it has for a long

time. What if Europe gets dragged into a

war or oil prices cause markets to crash

and we end up retiring at exactly the

wrong time? Working one more year not

only gives us time to see how things pan

out, but it gives us that extra buffer

to protect against the unknown, the

unknown risks of the future. But then

Freya looked at Dan and this is what

makes this meeting so memorable because

it was just perfect. She looked at him

and she said, "But what about the risks

that we die, the risk that we get ill?"

She said this half as a joke, but she'd

actually cut straight to the heart of

the real dilemma here. It's so easy to

get caught up in the news, the

headlines, these externalities,

stressing about inflation spikes and

market crashes that we often overlook

the other side of this trade, the risk

that you get ill, that your time runs

out, that you never get those summers.

You can always work one more year, and

if you do the plan, the mass will always

look better. You'll always have a bigger

margin of safety. But you have to

recognize that there is a point for each

of us where trading more time for money

does not make sense. But given the

compelling mass of just working one more

year, the noise of the press and the

uncertainty of the future, it's so easy

to just stick with the status quo to do

just one more year. But that's often not

where it stops. I've sat across the

table from many people like Dan,

financially responsible people who've

done all the right things. They've saved

well. They know their numbers. They have

clearly defined goals. And then we've

come together and built a holistic plan

that we then stress tested every which

way. And yet they still struggle to push

the button. And the reasons they give

for working one extra year are often

exactly the same reasons that they give

for working the year after that and the

year after that. When I first started

working as an adviser, I used to try and

connect with people like Dan to try and

give them that final bit of confidence

that they needed through more modeling,

more statistics with reasoning because

that's what they thought they needed.

But over time, I've come to realize that

actually this final decision, this final

bit of confidence, it can't be found at

the bottom of a spreadsheet. It's found

at the bottom of a bottle of wine that

you've shared with your partner or with

a mate over a great meal or after a

particularly bad week at work or just by

giving it some time because for most

people this last step is often an

entirely emotional decision. And at some

point, yeah, it does require you to take

a leap of faith. Think about the last

big purchase you made. Maybe that's a a

car, maybe that's a house. You would

have researched it to death. You read

the reviews. You ran the comparisons.

you went back and forth and weren't able

to decide and then at some point you

just bought it and almost immediately

the agony of that decision just

disappears. You just gone on with it and

you made it work. Well, retirement is

often no different. Obviously, it

retirement is a really big decision, but

at some point the analysis has to stop

and the decision has to be made. And

once it is, most people look back and

think, "Wow, like that really didn't

need to be as stressful as it was."

Everybody that I have helped retire over

the years has had doubts. In fact, the

only people who didn't have doubts are

those who unfortunately knew that their

time was limited. No matter how much

money you have, there's always something

to worry about. And the headlines in the

press and recency bias always make it

seem like the world is more unstable and

the future more uncertain than it has

ever been. like now is the worst time to

retire. So, it just seems logical to

want to wait for things to calm down or

to clear up, but you're never going to

open the newspaper one day and read a

headline that says, "Oh, by the way,

everything's chilled out now. You can

just retire." The irony is that the

people who tend to have the biggest

doubts, who struggle the most with

pushing the button, people like them,

are often the ones who end up being the

most resilient in retirement because

they've already done the research. They

know their numbers and they know how

they can adapt and are willing to cut

their cloth if they need to. They're

pragmatic and logical, which is exactly

why they struggle to push the button

because there is so much emotion tied up

in this decision. Now, of course, with

all of this, I'm not saying ignore the

math completely. The math matters a lot.

And on one hand, if it's saying that

you're way off track, then you know, you

should listen to that. And for Dan and

Freya, it was our initial analysis, the

stress testing that we did afterwards

that helped them to recognize that

they're actually in the endzone. It gave

them the confidence to then actually

start having the real conversations

about retiring. But from there, it's

often an emotional decision. So, if you

are stuck, it's often not more analysis

or waiting for some positive market

event that gives you the confidence to

make that final push. For Dan, it just

took a bit of time and a few long bike

rides, more time focusing on the

benefits of retirement instead of the

risks. Even then, it did actually take

him six months to actually set a date

and then he eventually retired 18 months

after that meeting. So, I guess he sort

of met things in the middle, which is

often the most rational way you can

actually answer a question that can't be

fully rationalized.

But in the run-up to that, he's still

had his doubts. At the start of 2024,

there were there were the early fears

about the AI bubble. Then Trump got

elected and then there was a escalating

geopolitical tensions we had going on

with Ukraine and then the Middle East

and everything happening in Israel. So

no small part of him felt that perhaps

now is still not a good time to retire.

But the way that I like to think about

this, and you've you've probably heard

the phrase time in the markets, not

timing the markets, which speaks to how

difficult it is to identify in advance

what when is a good time to get in or

out of the markets to the extent that

it's best not to even try. Well, it

follows then if you can't time the

markets, you can't identify in advance

when is a good time to retire. Now,

obviously retiring during a market crash

or a depression may not be the best

idea, but if markets are doing okay, as

they often are, that's probably the best

positive sign that you're going to get.

Unless, of course, you happen to know

something that the market doesn't. You

can't know for certain what is around

the corner. And it could be something

bad. But you need to remember that

retirement, it's not the finishing line.

It's a starting point. The decision you

make today on the day that you retire,

it is important. But what you do after

that decision, how you manage your

money, how you protect yourself, how you

adapt along the way, that is just as

important, if not more so. Which is why

I think you should now watch this video

here where I explain how you should act,

how you should react in retirement to

protect yourself from market downturns,

from inflation, from the unexpected.

Other than that, please look after

yourself and I'll see you in the next

one.