Background

Mr & Mrs Teachers, aged 60 & 59, have 3 adult children, one of whom is still at university. Mr T has retired from full time teaching and Mrs T reaches age 60 in 3 months and plans to retire. They have a collection of deposit savings, odd pension funds and investments not being managed or properly understood. They do not understand the respective merits of Mrs T’s pension and retirement planning options.

Retirement planning challenges

  • Help the clients understand the different merits of pension and investment income
  • Minimise the financial consequences which might be faced by a surviving spouse
  • Cater for the fall in net income to allow their current lifestyle to continue
  • Ensure sufficient cash deposits remain for safety and comfort

What we did

  • Advised Mrs T on the right pension option to take in order to optimise the balance between pension income and tax free lump sum
  • Prove that existing endowment policies should be surrendered early to save uneconomic premium payments and secure a fund to invest for tax efficient income
  • Provided for the surviving spouse to receive sufficient tax efficient income regardless of whom survives the other

The results

  • Re-arranged their existing investments and available cash to provide an extra £16000 p.a. in net income
  • Created a tax efficient cash fund of £100000 to cater for emergencies, safety & a feeling of comfort
  • Rationalised their investment & savings portfolio making it easier to manage and understand
  • Provided for increases in income throughout retirement to help cater for inflation