THE SCENARIO
Working towards retirement
Tom and Nicola are both in their early fifties and have twin girls who have recently graduated from university. Tom is a Partner at reputable City law firm and Nicola works part-time for a local charity. They both love their jobs, and with the girls moving away, they wish to review whether they are on course to achieve financial independence. Tom and Nicola’s previous adviser very much focused on investments and they are unsure whether they will have enough to fund their future lifestyle.
Their goals:
Tom wants to slow down at age 60 and work less hours although neither want to give up working entirely. They want to spend more time together exploring European cities, enjoying museums, galleries and restaurants. Tom likes the idea of working part-time as well as volunteering. They would also like to help the girls on to the property ladder at some point in the future.
How we can help?
We helped Tom and Nicola articulate their goals and to put a value on each of them. Using detailed income and expenditure analysis and a cashflow forecast, we were able to put a financial plan together taking into account their existing assets. We were able to show that Tom could work part-time on a proportion of his earnings at age 60, assuming his partnership income remained the same until then. We also demonstrated that Tom and Nicola’s existing investment portfolio was heavily weighted to a particular asset class and was much higher risk than they had thought. We also set out how regular savings in Nicola’s name could be tax-effective. As Tom and Nicola started the process in their fifties, we have several years to monitor the plan and the strategy to ensure they fulfil their lifestyle goals.
Ongoing support
By reviewing and updating their financial plan every year we can determine whether Tom and Nicola are on course to meet their lifestyle goals. We will also review their investment portfolio to ensure it remains in line with their risk profile and is performing in line with our expectations.
Disclaimer – this is a hypothetical client example and does not constitute a formal recommendation.