A couple was approaching pension age, with the husband working a 50-60 hour week in a high-pressured job. Their focus was two-fold: did they have enough in their pension pots to allow them to give up work and still pursue their passion for travel, and how soon could the husband give up his job.
We looked at the numbers
The couple had a generous combined income and had saved wisely into private pensions and other investments, so they didn’t need to worry about having enough money. But that didn’t mean things couldn’t be better.
Our proposed financial plan
As they were already in a good position financially, we looked at how we could make their money work better for them. We suggested they purchase a second home for £1m and increase their travelling budget to £20,000. The shortfall that appears in their late 70s could easily be met by the sale of one of their two £1m+ houses and select investments.
Outcome – So, will they have enough to give up work, and when?
Yes. They are retire ready, and by taking the steps we suggested, now have more than enough to give up work and enjoy a globe-trotting retirement. Following our meeting, the husband felt so reassured about the future that he gave up his job and is now enjoying being a non-executive director of 3 companies working just 6 days a month.
Just a few weeks later the couple set off on a 3-week trip of a lifetime to Antarctica.
Notes on how to read our charts
Financial Case Studies aren’t always the easiest thing to read. We’ve made ours as clear as possible, but if you’d like to know more, we’d be happy to explain.
When we work out your Financial Plan, we create two charts, Before and After.
BEFORE shows your current situation, and how your money is expected to provide for you in the future.
AFTER suggests how it could provide for you after some changes. These plans can be revisited regularly to ensure your money is always working hard for you.
The money coming in
Employment – the money you receive from your salary, bonuses, dividends etc.
State pension – the pension you receive from the government.
Other pensions – income from any company, private or nest pensions you’ve paid into.
Money Purchase Pensions
Savings and investments – money from ISAs, Premium Bonds, stocks and shares.
Asset Liquidation – money you could release by selling assets such as cars, paintings, antiques, stocks, shares.
Estate credit – the money you’d get from the sale of your home and any other property you own.
The money going out
Planned withdrawals –big purchases or expenses, such as a new car, home extension, holiday or gift.
Shortfall – the difference between what you’re spending and your income.
Total need – how much you need to live comfortably and enjoy your life and retirement.
Basic need – the minimum needed to live, but probably not the life of your dreams.
The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.