Finding out about you
We began by establishing what lifestyle Jack and Mary currently have, identifying their passions, hobbies and general expenses. Their pension funds were relatively small for people in their fifties. On further questioning, it appeared that Jack and Mary were not terribly keen on pensions, in fact one of their old pensions had not grown much at all, and it was in a “low risk fund”. They explained that Jack’s father had died when he was 67 and had barely enjoyed his retirement and they believed that his pension had been a waste of money. Mary was concerned that Jack was working so hard that perhaps he too would go the same way.
Together we identified what they wanted from life and whether some of the things that they were planning to do in retirement, could be brought forward – they could. We reviewed their existing arrangements and reflected what their current strategy would achieve – not enough. We considered what sum would be needed to enable them to finish working in 5 years time, a sum large enough that together with their existing arrangements would provide enough to have the lifestyle they wanted. A fairly significant figure, so how to achieve this? We discussed various options including saving more and taking more investment risk – they could save more, but didn’t want to take more risk and given that they wanted this in 5 years time, we didn’t think this would have been wise. Jack explained that he wanted a large amount for the sale of the business and perhaps that could do the job, on paper it would – but the number may have been unrealistic.
Earlier than planned
We worked out what was actually needed after sale costs and taxes. A considerably lower amount. As a result Jack and Mary are doing some of the things they planned to do in retirement today. They are also saving more, into a portfolio that properly suits their plans and ability to cope with risk. They are also preparing the business for sale over the next 5 years, knowing the minimum that they need – far less than they actually thought. Knowing his required “number”, Jack does not need to push for every last penny of a deal and has a very high level of confidence in achieving his net sale price. We are reviewing progress and Mary has persuaded Jack to see his GP for a health check.