Fiftysomethings: Considering all angles to improve your financial future

Considering all angles to improve your financial future

Why did Linda and Ian want independent financial advice?

Linda and Ian are both in their early 50s.

They had saved hard for much of their life and contacted us initially to review their existing investments, which were mostly held in Individual Savings Accounts (ISAs) as they were concerned that they were performing badly.

They also had some savings, which were receiving a very low rate of interest. In fact, they were actually losing money in real-terms because the interest they were getting was lower than inflation.

How did we help?

We could have simply changed Linda and Ian’s investments.

However, we are financial planners, which means that we build long-term relationships with our clients to understand what they want out of life. We then put a financial plan in place to help achieve that.

Once we delved a little deeper it soon became clear that what Linda and Ian really wanted to do was retire early; preferably before they turned 60. Sure, they wanted reassurance about their existing investments but early retirement was their real objective.

We therefore recommended to Linda and Ian that we produce a financial plan to help achieve that objective. They happily agreed to that.

We started by calculating how much income they would need to retire. And then contacted the providers of their existing pensions and investments for additional information. Finally, we obtained a State Pension forecast to find out how much they would get and when.

Armed with this information we used our financial forecasting software to project what their current pensions, savings and investments would be worth in the future. Based on some conservative assumptions, we concluded that Linda and Ian were close to being able to retire before they were 60.

We then calculated the extra amount they would need to pay into their pensions to be able to afford to retire early. The amount needed each month was relatively small and both Ian and Linda were happy to contribute the extra needed if it meant they could stop working at 60. Finally, we implemented the changes to their existing pensions and investments; simplifying how they were held.

We also recommended alternative savings accounts for Linda and Ian’s savings which will slightly improve the return they get.

How have Linda and Ian benefited from taking financial advice?

By delving deeper to find out what Linda and Ian really wanted we were able to put a financial plan in place to deliver their objectives.

If we had simply changed their investments it’s doubtful that Linda and Ian would now be on track to retire around five years early.

Furthermore, we meet at least once a year to review their plan and make any changes necessary to keep it on track.

Please note all case studies are fictional and for illustrative purposes only.

Please remember:

The value of pension and investments and the income they produce can fall as well as rise. You may get back less than you invested.

The Financial Conduct Authority does not regulate Tax Planning.

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