Derek and Sue made contact with us following an online search for advice. We arranged an initial ‘Discovery Meeting’ at our expense to find out more about their lives, where they were financially and more importantly where they wanted to get to. Derek had worked for a large Oil Services firm in a project management role for a number or years, including some time overseas. Derek had recently made the decision to start contracting and open his own personal service company. This resulted in a large increase in income. Sue spent time on her jewellery and fashion business which she ran from home. Derek had accumulated his wealth mainly from his pension schemes which had been funded by his previous employers. Both Derek and Sue had various ISA’s and shares which they wanted to receive guidance on also. Derek and Sue were soon to repay their mortgage and were looking forward to the prospect of being mortgage free.
The Challenges and Issues Facing Derek and Sue.
Already in their late 50’s, Derek and Sue enjoyed holidaying 2-3 times per year and wished to spend more time travelling. As Derek had always been in an employed position, this was always difficult, due to restrictions in holidays and work commitments overseas. Derek provided details of his existing pensions and investments and also details of his planned remuneration from his new limited company. Derek advised that he wished to retire at age 65, or at least start to decrease his working days, however he was very sceptical as to whether or not this was at all possible. Derek and Sue were both very concerned that they would have to significantly change their lifestyles in retirement, or worse still, work much further beyond age 65.
What we did.
We spent our second meeting discussing in detail what sort of lifestyle Derek and Sue enjoyed now and what they wanted to continue to enjoy, post retirement. We included increased costs for travelling as this was Derek and Sue’s main passion and something which was very important for them both. Having obtained details of their existing arrangements and more importantly broken down the costs of their desired future lifestyle, we calculated the amount of money needed, taking everything into account, to live the life they wanted, for the rest of their life, without fear of ever running out of money.
The result was YES, they could achieve their goal, more importantly they didn’t need to wait until after Derek reached age 65. Through our advice we demonstrated that they had accumulated enough wealth to comfortably start to slow down at age 62. In the meantime, we consolidated Derek’s pensions and investments (worth over £750,000) using a low risk, low cost investment approach. We recommended that for the next 3 working years, Derek maximised his employer pension contributions from his new limited company, saving significant levels of corporation tax whilst aiding their retirement goals.
Most importantly, our ongoing service with Derek and Sue was NOT purely based on managing their money, but on managing their financial planning strategy, in particular strategic lifestyle financial planning advice to enable Derek and Sue to continue to have the clarity to enjoy their lives, with increased confidence, peace of mind and real financial security.
In order to protect client confidentiality, the names in our case studies have been changed however they are all based on the true-life experiences of our clients.