How much is enough to support your lifestyle? If you don’t know, you don’t have a financial plan.
Do you know how much is enough to support your lifestyle without the fear of running out of money?
This is one of the most important questions that financial planning can help answer.
We see many people working longer than needed because they do not know how much is enough.
Working past retirement age is not a bad thing (and research suggests it is a good thing), but many people continue to work when they don’t want to, thinking they have to get as much money as possible before retiring.
But when can they stop doing the things they don’t want to do and start doing the things they do want to do?
Have you ever seen a gravestone with the epitaph ‘He wished he’d spent more time at work?’ No, me neither.
Knowing how much is enough will help you answer the most common planning questions, such as:
- When you can retire
- How much you need in pensions to retire comfortably
- How much you need to save
- Whether you need to downsize your home for financial reasons and not just an easier life (less housework!)
- How much risk you need to take with your investments
- How much extra you can spend in retirement
- How much money you can gift to your family
- Whether luxuries are affordable.
By analysing your assets, liabilities, income, and expenditures, understanding your desired lifestyle, and doing financial planning based around a cashflow model, you can calculate the answer to the essential question.
If you do not know how much is enough, you do not have a financial plan.
Do you know how much is enough for you? How confident are you about your financial planning? Take our two-minute financial planning scorecard at Custodia Financial Planning and see how you fare.