Charles, a divorced gentleman in his late 50’s with one adult child, had a very specific retirement target. This was great news as we were able, with the use of our retirement modelling tool, to advise him on the level of retirement savings required. We recommended a mix of tax efficient Pension and Individual Savings Accounts (ISA) funding.
Some 10 years later and on target, Charles decided to retire.
He had always been a cautious investor and in retirement, perhaps even more so. Our task was to therefore ensure he could retain lifetime income with minimal risk to capital, but still maintain his income target and allow for inflation. He was less concerned about leaving retirement funds on death as his son had a successful career and would inherit a substantial property.
Having analysed his basic living expenditure we recommended that this was funded from a ‘Guaranteed Indexed Linked Annuity’. This would give him peace of mind that crucial costs would always be paid for. The remainder of his savings would continue to be invested in cautious investment funds within a flexible drawdown plan, and used for non-crucial expenditure such as holidays, new car, gifts etc. This expenditure could be decided upon year on year dependent upon fund value and performance, but should in any case cover his planned additional lifestyle expenditure.
We were also able to plan for tax efficient income in retirement by using a blend of ISA, tax free cash from pension and pension income, thus reducing his tax burden.
Charles is now happily retired, enjoying spending time with his grandchildren, safe in the knowledge his income is appropriate to meet his needs, now and in the future.
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