Bringing forward retirement plans by several years

A senior employee considering retirement, was able to re-structure their arrangements and opt for earlier retirement, bringing forward his plans by several years.

Background

Our client aged 50 is married with two teenage children. He was a senior manager for a successful company with an annual income of £150,000.

Assets

Home £600,000
Cash £100,000
Investments £100,000
Pension Funds £500,000
Deferred Pension Benefits
Share Options c $300,000

Challenges Faced

1. Early retirement

Although enjoying his current role Mr Client wanted to consider retiring early and / or achieve a better work / life balance.

No real understanding of various preserved pension benefits.

2. Disorganised investments

The investments / pension funds were held in too many accounts and poorly structured.

Excess of paperwork overwhelming the client

Tax inefficient portfolio

3. No Budget

The clients had no idea of their current expenditure or their likely costs in retirement.

What we did

We created a detailed lifetime cash flow plan enabling the clients to see their expenditure both now and forecasted into retirement.

This enabled the client to budget for the short, medium and longer term.

Following a full review of the preserved pension benefits the client now understands each of his pension benefits and how these can be used to facilitate his retirement need.

Restructured investments (including the share options) and pensions to provide a structured portfolio geared to meet the income needs over the coming years.

Massively reduced complexity and paperwork for the client.

The Result

The detailed cash flow forecast demonstrated to this client that, although he could not afford to retire immediately he could retire early, in 5 years time, if he wished. In reality the client opted to partially retire to get his work/life balance in order comfortable in the knowledge that the shortfall created as a result of the reduction in income, could be ‘plugged’ by the income now being generated from the revised pension / investment portfolios. As an added benefit, the reliance on the ‘employee’ share options was reduced due to the diversified nature of the portfolios put in place.