Project Description

David and Anne are a married couple wanting to know when they can stop work.

Background

David (54) and Anne (53) have two children, Gareth aged 24 and Andrew 28.

Both children are married with their own children. Gareth is currently renting and Andrew is buying his own home.

David has a good job with a decent salary and he is a member of his employers defined contribution pension scheme and he also has money in a previous employer’s final salary scheme.

Anne is a nurse and is contributing to her NHS final salary scheme.

They currently have a small mortgage on their house along with modest savings and investments.

Key Considerations

They needed help to work out what age they were likely to retire at and the level of income they may need to support their planned lifestyle in retirement.

It was important to them to work out whether they would be able to help Gareth get on to the property ladder after helping Andrew with a deposit on his home. They would also like to make some provision to help their grandchildren go to university.

They also wanted to continue their passion for holidays abroad as long into retirement as they could. They were both unsure whether their current pension savings and other savings would be enough.

Approach

We met with David and Anne and built a thorough understanding of their current expenditure and to consider how much income they would want once they are both retired.

  • We confirmed that the mortgage would be paid off before retirement.

  • We used a retirement modeller to show them a number of different scenarios of how they could adapt their savings just now and the impact this had on their income in retirement.

  • We were able to factor in providing additional sums of money to give Gareth help towards a deposit for his house purchase and some help the grandchildren with university fees.

  • We were also able to show them how making additional pension payments may help give them more choice around the age they may retire at.

This was all helped by explaining the new options available to them under the “Freedom and Choice in Pensions” introduced in April 2015.

Outcomes

Both David and Anne are now much more confident they will be able to retire safe in the knowledge that their retirement income will last at least as long as they do, even taking account of inflation.

We agreed to meet with David and Anne annually to check their progress and to ensure that their plan remains on track.

We will also review and update the retirement modeller giving them confidence that they are doing the right thing and peace of mind that their money will last.

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