Retirement planning: why purpose matters as much as wealth

As financial planners, we help people manage their savings, investments, and pensions, but at the heart of what we do is understanding you, not just your money. That’s because financial advice is most effective when it’s deeply personal. It’s your life we’re planning for, not just your portfolio.

For many of our clients, retirement is a major goal. And understandably, a lot of the focus in the years leading up to retirement is financial, building up enough wealth to comfortably step away from a monthly paycheque. But is money the only thing worth focusing on?

We’d suggest not.

There’s a saying that retirement requires three key ingredients: health, wealth, and purpose. While we often talk about the first two, it’s the third purpose that can make the biggest difference in how fulfilling your retirement really is.

What are you retiring to?

Most people know exactly what they want to retire from - demanding jobs, long commutes, stressful schedules. But fewer people have a clear picture of what they want to retire to.

And that clarity matters, for at least two important reasons.

Purpose helps you understand what retirement will cost

Knowing how you want to spend your time gives you a clearer idea of what your retirement will cost. Consider two very different visions:

• One person sells up and volunteers abroad in a modest, developing community, with simple living and low expenses.
• Another envisions a life of global travel, luxury yachts, fine dining, and first-class flights.

Both are valid dreams. But the financial requirements are obviously very different. Once you know what your ideal retirement looks like, it’s easier to work backwards and build a plan to support it.

Purpose helps you live better - and longer

Having purpose also contributes to your health. Research shows that people who wake up with a sense of direction live longer, healthier lives.

The Blue Zones - areas of the world known for high life expectancy are a great example. In Okinawa, Japan, it’s called Ikigai. In Nicoya, Costa Rica, it’s plan de vida. Both translate to “why I wake up in the morning.” According to the Blue Zones researchers, having a sense of purpose can add up to seven extra years to your life.

And it’s not just about longevity. Studies show that many retirees wish they’d spent more time thinking about how they’d spend retirement, not just how to fund it.

Finding your purpose: start asking the right questions

Not everyone has an immediate answer to “What’s your purpose?”, and that’s okay. But it’s worth spending time on. Here are some good starting points:

• What excites or energises you?
• What skills or experiences could you share?
• What truly matters to you? (If you’re not sure, this could be a good time to define your core values.)

Once you’ve listed a few ideas, dig deeper. Ask yourself: What is it about this idea that appeals to me?

Take the earlier examples. If your dream is to be a missionary overseas, is it really about location? Or is it about giving back? If so, could volunteering closer to home be just as fulfilling and easier to sustain long-term?

If it’s about sailing the world, is it the freedom you crave? Could that same sense of freedom come from downsizing, living near the sea, or even taking up sailing part-time?

And importantly: Can you test these ideas now, before you retire?

The power of planning ahead

Exploring your purpose takes time, but it’s time well spent. The earlier you start thinking about life beyond work, the more options you’ll have.

As we mentioned earlier, health, wealth, and purpose are interconnected. If you clarify your purpose early, it might help you leave a high-stress job sooner, while you still have the health and energy to enjoy the next phase. That’s one of the themes from the book 20 Good Summers, which we’ve referenced in other posts.

So, as you think ahead to retirement, remember: building wealth is essential, but so is protecting your health and finding a sense of purpose. Don’t overlook them.

And if you’re taking a break this summer, perhaps sitting in the sun with a cool drink and some time to reflect, consider using that space to explore what really matters to you.

We’re here to help you think through all of it — not just your finances, but your future.

Richard Wadsworth is a financial planner with over 30 years of experience, who specialises in working with busy individuals and families looking ahead to retirement and women in Scotland going through separation and divorce. You can reach him on mobile: 07880 034246 or email: richardwadsworth@carbonfinancial.co.uk

The value of investments and the income derived from them can fall as well as rise. You may not get back what you invest.

This communication is for general information only and is not intended to be individual advice. It represents our understanding of law and HM Revenue & Customs practice. You are recommended to seek competent professional advice before taking any action. Tax and Estate Planning Services are not regulated by the Financial Conduct Authority. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.