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Starting Retirement With a Plan
Summary
Richard (aged 57) contacted me after a few very difficult years, including losing his wife four years previously. With everything that had been going on, Richard had lost touch with his finances and when he eventually reached out to his former financial adviser, he found out that the adviser was no longer in business!
Richard recently decided that “life was too short” and so he decided to retire because he believed that he was financially secure enough to do so. Consequently, he realised that he needed to get a grip of his finances and to put in place a structured financial plan for retirement.
After assessing Richard’s investable assets and income requirements, we established that he was holding a significant amount of cash in a wide range of bank accounts in addition to holding a significant amount of cash in his pensions. It was clear that this money was not working as hard as it could be and was at risk of the damaging effects of inflation. Furthermore, there was no clear strategy for the rest of the invested money that was in the pension and also in his other non-pension investments. It also became clear that, other than cash, he was heavily exposed to a few specific sectors which meant that his investments lacked diversification.
I can safely say I'm much more confident on my financial picture and outlook now, so let's get the ball rolling!
After discussion, we agreed on a plan to:
- Leave Richard with plenty of cash to fund his quite expensive lifestyle over a number of years. This was very important to him.
- Invest a chunk of Richard’s cash savings into a range of tax wrappers to hopefully achieve some long-term growth whilst being able to defer income until many years down the line when it might then be needed.
- Restructure Richard’s pensions to create the diversification that they currently lacked, leaving him with another pot of money to draw on, tax-efficiently, later down the line.
Richard did not want to be too ‘hands on’ with his investments so being able to delegate everything to KDW, whilst he got on with enjoying life, was something that really appealed to him. Ongoing KDW reviews will mean that we can continue to ensure that Richard’s financial plan remains on track and we’ll also be able to address all sorts of wider issues such as inheritance tax mitigation.
The value of investments and the income from them can fall as well as rise and you may not get back the amount originally invested. The information contained within this case study is for guidance only and does not constitute financial advice.
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