Retirement looks different for everyone. Given we all lead different lives, have different goals & attitudes to working, why should we all stop work at the same time? Some would like to retire early and spend their time with family and/ or ticking items off their bucket list, other people would prefer to keep their toe in the water and not fully retire, but rather take a step back or maybe change tack completely and do something for the ‘fun’ of it. Whatever camp you fall into, we want to ensure that you can continue to fund your desired lifestyle, leave a legacy to your children (if that is important to you) and achieve everything you want to in this new stage of your life.
From a financial planning perspective, when and how you retire, is one of the most important life-stages to plan for. After a lifetime of working and building up your savings, do you know if what you have saved will be enough to support you through retirement? By taking you through our Pre-Retirement Service we are able to establish at what point you will reach ‘financial freedom’ – when you can work less hours, stop completely or make significant life changes outside of your career.
What was the situation?
Alison (57) and George (60) love to travel and had a house in the UK along with a small property in Canada where they were spending increasing amounts of time. Alison worked for a large bank and George had recently retired. The couple wanted to find out whether it would be possible for Alison to stop work and for them to spend more time in Canada, perhaps even move over there permanently, whilst also allowing for frequent trips abroad, including back to Europe. Their list of goals for the future was long and they had no shortage of ambitions for what they wanted to achieve during their retirement (which we loved hearing about!), including the possibility of buying another property in Canada close to their favourite ice hockey team, a sport which they had become big fans of during their time in Canada. But they weren’t sure about how to make this dream a reality in terms of what they might have to do financially to make it happen.
George had a pension however this wasn’t enough to fund their lifestyle completely, so we started a planning process with them to establish whether Alison needed to carry on with some contracting work, or whether she could stop altogether and enjoy a well-deserved retirement alongside George.
How we worked together
We sat down with them to discuss all their ambitions and what they were looking to achieve. They had a long list of goals to share with us, which we always love to hear, and which make our job so much more interesting! We needed to gain an understanding of what their costs in retirement might be, which was a slight challenge given the multiple scenarios that might occur: visiting Canada more often; moving to Canada; buying a second property over there; and potentially selling their UK property. We produced various different scenarios for them looking at whether the assets they currently had would fund each one of these options if Alison stopped work.
We worked with Alison and George, chatting about what each of the scenarios might look like, and what that would mean for both their current cost base and the various costs that could be incurred depending on which scenario they might ultimately choose.
Luckily for us they are very detailed people and once they set their mind to something they do it very well, so we were able to gather relevant financial information that we could then put into our cash flow modelling software and start to discuss options with them. All of the meetings that we held with them were in person (pre Covid) and were very much focused on what they wanted their lives to look like, and not driven by “what do you want your investment portfolios to look like”.
Once we had produced their plans we also did a lot of stress testing on them, as we do with all of our cash flow plans for clients. We needed to ensure that if the “worst case scenario” happened they would have enough fat in the plan for it to still work for them.
Where are they now?
They are still between the UK and Canada (largely due to Covid) however in the next 6-12 months they will be moving to Canada full time. We have finalised a plan with them which gives them the peace of mind that they will have the cash flow to support them in their future in Canada, and of course we review this regularly with them to account for any changes in their circumstances or with their plans for travel (or ice hockey supporting!).
“We were thinking of you today and feeling very appreciative of the work you do to keep us able to live such a happy retirement – many thanks!!”
As part of our pre-retirement Life Planning service, we gather information on your goals, your available assets & planned expenditure to put a detailed roadmap in place on your way to Financial Independence. This includes a tiered investment strategy, along with an income drawdown strategy for when you enter your version of “retirement”.
If you are considering your options, for yours and your families future – whether it’s around a change in career, starting a new business, retiring to the golf course, relocating overseas or just taking a step back for a while, speak to us – the sooner the better.