In this week's blog: to make the most of the final years of your career, you need to create a structured plan - which includes money as a key consideration

Could you afford to leave the rat race?

Imagine being able to take a short sabbatical from work, every seventh year…

…not as a holiday, but in order to take a University course you’ve always been interested in... to write a book… or complete an essential training course.

Wouldn’t it be wonderful to be able to regularly refresh your skills and then come back to work re-energised and full of ideas?

Several decades ago in Israel, that was an option for many government employees, teachers and academics, who paid into a special six-year study fund. Not only was it tax-free, but employers paid the bulk of the contributions, so this was a fantastic benefit for companies to shout about!

Nowadays, this short-term savings fund can be used for any purpose, not just study. Still, there is an important lesson here for both your employees – and yourself.

You see, as we hit our late 40s and 50s, our priorities at work and in life tend to change.

Here at Punter Southall Aspire we’ve certainly had staff members taking sabbaticals.

After working for more than 30 years, they needed a mental break, a chance to pursue new directions, and an opportunity to think clearly about what they wanted to achieve before they entered their retirement phase.

I’ve taken a mini-break myself, taking a month off to climb the Himalayas a couple of years back.

Others decide to go part-time or work a few days a week from home, either because it’s finally time to slow down or because they suddenly have elderly parents to take care of.

Yet others change careers, leaving the corporate world altogether to launch a new business or alternately, taking on a less demanding role.

What they want out of work might have changed a lot since they were younger – but they’re not ready to retire quite yet.

These are all common changes people make…

…and you may be thinking of making one of them, too. You might even have staff members considering them!

But you can’t carry out any of these plans without money behind you.

Most people can’t just decide to take a three-month break from work without having savings to back this up. – which is what thos Israeli employers I mentioned earlier recognised, and helped with, all those years ago.

If people don’t have savings, they may have to change their lifestyle significantly to be able to afford to reduce their working hours or take a lower-paying job.

Similarly, businesses can take months and even years to really ‘take off’ and certainly to become profitable. Entrepreneurs usually need significant personal funds to get them through those early years.

Over the past few weeks, I’ve been arguing that you (and your employees) need to create a structured plan for this time of your life…

…so you can make the most of these final years of your career, maximising opportunities and living them to your fullest.

Tax year end guide workplace

Financial planning has to be a key part of this process.  

We are likely to think regularly about the money we need to put away for our pensions (although perhaps not regularly enough!). And of course we consider big expenses like the mortgage.

But we perhaps more rarely consider what funds we would need in the final decade or two of our careers to finance changes in our working patterns.

Or, we might not think about it until it’s too late, and we can’t afford to make the changes we want.

So why not take this opportunity to think about what the last 10-20 years before your retirement might look like? And encourage team members to do the same thing!

  • Are you going to continue working full-time?

  • Would you benefit from a short sabbatical or study leave?

  • Do you want to spend more time volunteering or exploring other opportunities?

  • Will you face additional pressure to care for ageing parents, that might impact your work life?

And if you conclude that some changes might be in order several years down the line, how are you going to finance them?

As an employer, I love the Israeli example of helping staff build a short-term saving fund, because studies have often shown that people are more likely to put money towards near-term goals than long-term goals like a pension.

But in the absence of that, this is the perfect chance to look at your entire financial picture.

An experienced financial adviser will be able to help you to consider your consider expenses, mortgage, debts, credit cards, liabilities, investments and your insurance policies.

You need to maximise every penny coming into your account in the vital years ahead…

…so that you can not just retire comfortably, but perhaps give yourself the freedom to really explore your options in the decade before retiring, too.

Posted by Steve Butler

Topics: Age diversity, wellbeing, Mid-life

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