IS THIS THE RIGHT TIME FOR ME TO RETIRE?

This is one of those burning questions… and one that I get asked more often than any other question when I talk to people who are thinking of selling their businesses.

Some clients, believe it or not, ask me the same question twenty times over a period of months or even years.

So, how do you decide when the time is right for you to hang up your spurs?

The first question that you must ask, of course, is can you actually afford to retire? Many people are surprised to find that life after retirement is actually much more expensive than they think it is going to be.

The retiree will need to factor in sufficient money for holidays, meals out, hobbies and entertainment, and indeed, for the cost of all the many other things that make retirement fun. Everyone who is considering retirement must also do their sums very carefully indeed, you must make sure that you have allowed for the impact of inflation over a retirement that, depending on when you have had enough of the daily grind, could last for thirty years or more. If you’re lucky.

But once you are sure that you can afford to retire, what are the other factors that you really need to consider?

BUSY DOING SOMETHING

My most important single piece of advice on this would be to complete the following sentence: “I will retire and then I will…” There must be something compelling that you want to do during retirement. My own father made the most terrible job of his retirement. He retired at the relatively youthful age of 56 and he became an old man almost overnight. He went from running a public company to a life where the most important decision that he made most days was which pub to go to for lunch. That isn’t the way most people would want their life to be – if they stopped to consider it.

There has to be something in your post-retirement life that excites you and makes you want to leap out of bed every morning…

My clients who are most enjoying their retirements are the ones who have something compelling to do every day. This might involve foreign travel, learning to fly an aeroplane, running a donkey sanctuary, looking after the grandchildren, creating a wonderful garden, studying for an Open University degree, starting a new business, restoring an old house. There has to be something in your post-retirement life that excites you and makes you want to leap out of bed every morning.

Otherwise it simply won’t work.

STAYING PUT

If you can’t think of something compelling and exciting to do, then it may be best if you carry on working. It is important to remember that running a business does not just provide an income.

It also provides regular intellectual challenges, a position (hopefully of respect) in the community. It can bring friendships with clients and staff, the satisfaction of doing a good job for the clients and a purpose in life. I shall always remember a client who carried on working full time until he was 93 years of age. He worked a full day on a Friday, he went home happy with his week and then died in hissleep on the Saturday night. It was absolutely the way that he would have wanted to go.

A WORD TO THE WISE

However, the only word of caution here is that you must be mentally and physically fit enough to continue. It would be a terrible shame to work all your life to build a successful business and financial security only to see it taken away from you in its final years by a younger and sharper competitor. Another risk of working beyond a sensible point is the risk of making a silly compliance mistake and ending up paying a huge fine.

So in summary then, before you take the huge step of retiring, make sure that you can afford to do so financially and make sure that you have something compelling and exciting to do with your time.

Get it right and retirement can be the most satisfying and fulfilling period of your life. Get it wrong and you could spend your last years rueing the day that you decided to hang up your spurs.

Adam Walker is a management consultant, business sales agent and trainer who has worked in the property sector for more than twenty-five years. www.adamjwalker.co.uk