As parents, we often grapple with the question: would you add 5 to 10 years to your working life to help your children get onto the property ladder? For many, the immediate response is to consider the financial burden this might impose. However, what if the solution isn’t about extending your working life in the traditional sense, but rather about redefining what work means to you?
Investing in Human Capital Development
The concept of human capital development is crucial here. By investing in your skills, passions, and health, you can transition into work that feels less like a job and more like a fulfilling pursuit. This shift not only enhances your overall well-being but also makes the idea of retirement less urgent. When you are engaged in work you enjoy, that brings you purpose, the notion of retirement becomes fluid—something you might choose to delay, not out of necessity, but out of desire.
This approach could mean that, instead of fearing outliving your capital, you continue to generate income and remain financially robust. The benefits of this mindset are twofold: it ensures your own financial security and positions you to help your children with their property aspirations without feeling the need to sacrifice your well-being or leisure.
Challenging the Pension Shortfall Narrative
Many pension companies warn of the dangers of pension shortfalls, creating anxiety around the idea of early retirement. However, these warnings often overlook a critical factor: the increasing number of people who remain engaged, curious, and healthy enough to continue working well past the traditional retirement age. These pension companies typically assume a cliff-edge retirement at 65 or 70, where work abruptly stops. But life today doesn’t have to follow that outdated model.
By staying engaged in work that you love, you not only defy these assumptions but also maintain a steady income stream that can support both your lifestyle and your children’s needs. In essence, you’re thinking smarter—leveraging your human capital to create a life where work and play intertwine, and where retirement is not a deadline but a personal choice.
We call such a life plan, your GAME Plan (Goals, Actions, Means, Execution).
The Reality of the Housing Market
Let’s not ignore the fact that getting onto the property ladder has become increasingly challenging. The recent report by Savills highlights that the “Bank of Mum and Dad” funded £9.4 billion worth of property purchases in 2023—a twofold increase since 2019. This surge reflects the stringent mortgage market and rising mortgage rates that have made it difficult for first-time buyers to secure loans without family support.
Indeed, 57% of all mortgaged first-time buyers in 2023 received financial assistance from their families. As mortgage rates remain high, it’s predicted that the need for parental support will continue, although the proportion of those requiring help might slightly decrease as rates gradually fall.
But, now you know you don’t have to sacrifice a comfortable standard of living in retirement to give your kids a helping hand.
The Smarter Path Forward
So, what does this mean for you? It means that, instead of solely focusing on amassing a large pension fund or dreading the idea of working longer in your main job, you could invest in developing a career or a business venture that brings you joy and fulfillment. This approach not only preserves your financial health but also positions you to help your children without the need for drastic sacrifices.
In conclusion, by embracing work that aligns with your passions and by staying engaged in your later years, you can create a sustainable financial future for both yourself and your children. This is about thinking smarter, not harder, and redefining what it means to work and retire in today’s world.
Don’t let fear-driven narratives dictate your financial decisions—explore opportunities that allow you to continue thriving, both personally and financially, while still supporting the next generation.
Academy of Life Planning 