# The Shocking Maths of Working (Just) One More Year

## Метаданные

- **Канал:** James Shack
- **YouTube:** https://www.youtube.com/watch?v=cxOMA_cQH6w
- **Дата:** 01.04.2026
- **Длительность:** 15:00
- **Просмотры:** 444,814

## Описание

👉🏼 Looking for help planning your retirement? 
I am a Chartered Wealth Manager and Partner in a financial planning practice based in the UK. Find out how we can help here: https://go.novawm.com/yt/cxOMA_cQH6w

Risk Warnings and Disclaimers

Capital at risk. Past performance is used as a guide only. It is no guarantee of future returns. Different funds and asset classes carry varying levels of risk depending on the geographical region and industry sector. You should make yourself aware of these specific risks prior to investing. Prevailing tax rates and reliefs are dependent on your individual circumstances and are subject to change. We do not provide tax advice. Any examples used in the video are for illustrative purposes only and you may get less back than the figures shown. This video does not constitute personal advice. We do not take any responsibility for third party websites and content we may link to from this video. 

This video is issued by Shack Media Limited on behalf of Nova Wealth Limited. Shack Media Limited is an Introducer Appointed Representative of Nova Wealth Limited. Nova Wealth Limited is authorised and regulated by the Financial Conduct Authority (FRN: 778951) and is a limited company registered in England & Wales (10739796) at 20 Farringdon Street, London, EC4A 4AB

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## Содержание

### [0:00](https://www.youtube.com/watch?v=cxOMA_cQH6w) Segment 1 (00:00 - 05:00)

Sometimes, when the masses 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 show you what I mean. A few years ago, I was approached by a couple, Dan and Freya, 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 spread across pensions and ISAs 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 Freya'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 to 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, uh Dan was absolutely mad about cycling, and he wanted to spend half the summer in France following the Tour de 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, they were way more prepared than most people that I start working with. So, the next step was to enter all of that 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 ISAs, 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 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. You know, some people they don't need it, but some people do and it can cost an eye-watering amount of money. It's absolutely ridiculous. So, any good financial plan should have a provision for this. You know, you've got to understand where this is going to come from if you need it. So, here we have a scenario of £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, if they'd be happy to dip in and pay for their care from equity within the home, especially if they've already helped their children get onto the property ladder, 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've 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 1 year? " And if they did that, at the age of 85, they'd be projected to be at £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 work, every year they push back their 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

### [5:00](https://www.youtube.com/watch?v=cxOMA_cQH6w&t=300s) Segment 2 (05:00 - 10:00)

initial read of this was the message 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 to get that 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 de 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 math 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 Freya, 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 ever-present threat that it 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 sell-off of 2022. So, Dan said, "The world just feels more uncertain than it has for a long time. And 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 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'd 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 math 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 math 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 advisor, I used to try and connect with people like that 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

### [10:00](https://www.youtube.com/watch?v=cxOMA_cQH6w&t=600s) Segment 3 (10:00 - 15:00)

this final bit of confidence, it can't be found at the bottom of a spreadsheet. It's 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 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 Dan, 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. On one hand, if it's saying 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 end zone. 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 6 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 still had his doubts. At the start of 2024, there were the early fears about a AI bubble, then Trump got elected, and then there was a escalating geopolitical tensions we had going on with the 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 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.

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*Источник: https://ekstraktznaniy.ru/video/53027*