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Early Retirement

Future Planning Wealth Management has expert knowledge and systems in place to work with clients in helping to deal with unexpected changes in circumstances to understand what the impact of this means to them. This couple came to us after being referred from someone that we identified did not need to pay for advice, but was happy with our honesty in respect that we will only work and charge fees if there is value for money for the client.  


Client scenario:

  • Husband aged 54 and wife aged 60 
  • Married with two children both grown up 
  • Husband made redundant and wife working part time still 

Assets:

  • Residential home valued at £560,000 with no mortgage 
  • Various work based pensions 
  • Redundancy received of £140,000 
  • Personal savings of £300,000 in various accounts 
  • Investments of £275,000 in NISAs between both clients 

Client concerns:

  • Is there enough money to retire or not?  
  • Discussing Inheritance Tax (IHT) concerns for two children
  • Returns on NISAs have been good but feel it is high risk 

Some of the work involved:

Meetings were held to accurately receive all figures in full including income and expenditure cost of buying and replacing a car as no longer provided by company, and to clearly understand goals so that we could understand the value that we were going to add.  

Once this stage had completed, then we ran the number crunching exercises, together with understanding what the cashflow forecast will say.  We re-jigged some figures around and stress tested the figures.  A Risk Questionnaire was completed and an in-depth discussion regarding "capacity and tolerance for loss" was held. Different models were created to show alternative approaches and the recommended route. 

Understanding the tax figures really well both this year and going forward. Obtaining up to date information on existing investments to understand the risk of them.  


Solutions:

We presented a clear picture of both what the current position looked like and future position will look like, including answering "can I retire". The great news was that actually they could retire immediately, and even after factoring in hypothetical stock market crashes for the investments to provide additional peace of mind.  We covered:

  • What would happen if either client passed away, to the other client's financial position
  • What the Inheritance Tax position looked like and possible ways to reduce this for the children
  • How to reduce income tax liability considerably 
  • Because there was enough to retire, the existing investments were altered to reduce risk.  Taking increased risk when the goals have been hit is not recommended 
  • Using non pension income to begin with and life off of savings for a year 

As a result, we showed the client how these changes meant that there would be:

  • Cost savings from the changes made with the NISAs 
  • Tax savings so more redundancy is paid to the clients 
  • Clients finally know that they can retire and begin enjoying their lifestyle 

There are many varying factors to consider, different allowances and vehicles to assist with scenarios similar to the above. No two cases are the same and if you feel you are in a similar position to the above, you are welcome to send an enquiry through whereby we can discuss if we are able to add value to your situation.


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INVEST NOW

Sanjay provides a comprehensive service with thorough and well researched advice for remortgaging and long-term investment. By listening to my aspirations and asking appropriate questions he has undoubtedly left me better off.


Richard Oxfordshire

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