Clare & Michael were in their late 50’s and both working full-time until Michael was made redundant unexpectedly. They had several Personal Pensions from past employers and had also been saving into Individual Savings Accounts (ISAs). They had both worked hard in their respective careers and were ready for a change of pace in their lifestyle – Michael was keen not to return to work if possible, his past career had been stressful, involving long hours.
They wanted to know whether early retirement could be an option for them.
What we did:
We met with Clare & Michael, and fully assessed their situation; their income, outgoings, Pensions, ISAs and cash savings. We then helped them think through how much income they would like each month to live the lifestyle they wanted – having two overseas holidays a year plus enough money to reguarly treat their grandchildren were key. They calculated they needed £3,000 a month to meet their lifestyle needs.
We talked them through the various pension plans (totaling £425,000) they had and explained how they could take income from them; buying an annuity, flexi-access drawdown and lump sums. They both had a Stocks & Shares ISA, combined these were valued at £210,000.
We then wrote to each Pension and Stocks & Shares ISA Providers to gather more up-to-date information on their plans; including fund values, investment funds and charges so we could make a recommendation on whether these were still suitable for them.
We built a financial plan which allowed Clare & Michael to retire early, showing a projection of how their Pension and ISA funds could support them into retirement.
Clare continued to work for two years until she was 60; and Michael decided not to return to his stressful job. As Michael was no longer working there was a £1,000 monthly shortfall to meet household expenses. We advised he meet this shortfall by taking some tax-free cash from his personal pension (to be used as income) plus tax-efficient income from his ISA which had £160,000 built up within it.
Once Clare retired aged 60; we reviewed their Plans; and advised them to restructure how they were taking the £3,000 income they needed. We altered their income to take a mixture of tax-efficient income from their ISAs, tax-free cash from their pensions and flexible income drawdown payments from their pensions.
Once their State Pensions start (which will pay them £1100 per month), we will advise them to reduce the amount taken from their private pensions and ISAs as their income need from these investments will reduce.
Clare & Michael are now enjoying their early retirement together, safe in the knowledge that they are financially stable and have a flexible plan going forwards.
We get together every six-months to review if their lifestyle or circumstances have changed, review their investment strategy and make ‘tweaks’ to their retirement plan, which Clare & Michael have told us brings them great peace-of-mind.
Arrange an initial meeting to discuss your pension & retirement planning
We can help you plan for retirement, whether you are saving towards retirement or already retired.
Please contact us at firstname.lastname@example.org or call us on 01223 792 196 to arrange an initial appointment, at no cost to yourself, with one of our Independent Financial Advisers.
About Martin-Redman Partners
We are a team of experienced Independent Financial Advisers who can advise on your personal or business financial arrangements. We have been building trusted relationships with clients for many years by articulating clear and tailored recommendations in areas ranging from investments to retirement planning, to complex estate planning advice.
We offer expert independent financial advice throughout Cambridgeshire, Leicestershire, Suffolk, East Anglia and the South East. Many of our clients are within, or are in the surrounding areas of Cambridge, Grantham, Stamford, Bury St Edmunds, Frinton on Sea, Ely, Peterborough, Huntingdon, Cambourne, Newmarket, Soham and Oundle.
The information contained is for guidance only and does not constitute financial advice. It is based on our understanding of UK legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change. Accordingly, no responsibility can be assumed by Martin-Redman Partners its officers or employees, for any loss in connection with the content hereof and any such action or inaction.