Project Description

Robert and Elaine are approaching retirement and they are concerned whether they would run out of money

Background

As Robert and Elaine approached their desired retirement age, they were keen to ensure they maximised their retirement income and made the most tax efficient use of the assets they had accumulated.

Robert and Elaine held multiple pension pots, investments and buy to let properties which they planned to use to help fund their retirement.

Key Considerations

However, they weren’t sure what all their assets could deliver in terms of income and how long it would fund their retirement for.

They also wanted to know more about the recent changes to pensions legislation which they had read about in the papers and how they might leave something for their two grandchildren.

Robert leads a very active life and felt he did not want to stop work completely but wondered about how a part-time job might affect his tax position.

They both had been reasonably cautious and also wanted to be sure they were not taking unnecessary risks as they moved towards their retirement.

Approach

During our initial meeting we spent time understanding their situation and answering their questions. Explaining the changes under “Pension Freedoms” and the various choices they faced at retirement.

  • After our initial meeting we sat down with Robert and Elaine and agreed some goals around their lifestyle in retirement before drawing up a cash flow forecast which focused on their long-term retirement plans.

  • This helped demonstrate how continuing to work or stopping work, together with the different levels of income associated with each scenario.

  • How these various scenarios affected the amount of income they could receive and also the legacy they might leave their family.

  • We were also able to factor in the cost of taking a 3 month round the world holiday early in their retirement.

  • We were able to reassign some of their assets to improve the tax efficiency of their savings as well as utilising some of Robert’s tax-free cash from his pension to fund the holiday.

Outcomes

Working together meant that Robert and Elaine could take their dream 3 month round the world holiday as well as helping them both take a retirement income of over £20,000 per year and remain basic rate tax payers.

Robert and Elaine now have annual meetings with us where we update and review their lifetime cash flow forecast together with their financial plan, providing them with financial peace of mind, to live the life they want.

Secure in the knowledge that they won’t run out of money and they have the flexibility to provide for their grandchildren as they wish.

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