John and Sandra's Story
John is age 60, married to Sandra and has two children who are grown and financially independent. He has successfully managed his own engineering business for over 30 years. John would like to retire and has decided to sell his business.
Why they approached us
Having built up savings in pension arrangements with a number of providers he would like advice to establish how to provide income throughout retirement from both his pensions and capital from the sale of his business.
How we helped
We met with John and his wife Sandra to establish their income and capital requirements in retirement.
One main objective was flexibility and control over their capital and income, Sandra did not have any pension provision of her own and John wanted to ensure that Sandra would continue to receive an income should he pre decease her.
We discussed their attitude to investment risk and capacity for loss which are fundamental to the advice process.
Following the assessment of John and Sandra's needs, objectives and appetite for risk, we consolidated his pension arrangements into one plan which provided the desired level of flexibility to control the income that they require now and in the future as circumstances change.
We also invested the proceeds following the sale of the business to provide additional income as tax efficiently as possible utilising Individual Savings Account, Income tax and capital gains tax allowances, now and with a plan to use them each year.
We recommended a diversified portfolio to generate income with the potential for capital growth ensuring that it was matched to their attitude to risk. We discussed the amount of income that they intending to draw making sure that it wasn’t too high a yield and we ran a cash flow forecast projecting how the fund would be affected using assumed growth rates and an increasing income.
We ensured that there was sufficient capital accessible, as they were planning a small renovation to their home and they wanted to travel more.
John nominated Sandra as the beneficiary for his pension should he pre-decease her so that she would receive 100% of his pension, they also liked the idea that this could eventually be passed on to their children inheritance tax free.
For many this will be one of the most important financial decisions that they make, having spent a lifetime accumulating their wealth to then transition into retirement. It is important that their options and risks are fully explored so that they understand the implications of any decision that they make and ensure that it is the best outcome for them.
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