Early Retiree Client Case Study
Background
- Mr Client aged 50
- Married with two children aged 15 & 18
- Accountant for a large company, Income £140K pa
- Assets:
- Home £450K
- Holiday Home £230K
- Investments £150K
- Cash £50K
- Final Salary Pension = Income £80K pa (at age 60)
Challenges & Concerns
- Although enjoying his work Mr Client wanted their finances organised such that he would be able to consider early retirement at age 58
- The investments and cash accounts were held in too many accounts and were poorly structured
- The result was poor investment performance and payment of too much tax
- The clients had no idea of their cost of living
- No Wills or Lasting Powers of Attorney
- In the event of either partners demise the estate would not have been left to the right beneficiaries
- No provision for the possibility of mental incapacity due to illness/injury
- The children were not well provided for
- Concerned about IHT
What We Did
- Analysed their income/expenditure to ascertain what they required to live on and what was spare cash. This allowed for an investment strategy that would provide the opportunity to retire at age 58
- We consolidated and simplified the investments and cash accounts into a high performance investment portfolio that is benchmarked against a return target
- We changed the way the clients owned their home and arranged for tax efficient Wills to be prepared alongside “Lasting Powers of Attorney”
- Implemented a Family Trust fund to address the IHT liability
The Results
- We created a clear budget and a plan to get to financial independence by age 55
- Eliminated an Inheritance Tax liability in excess of £100K
- We simplified the management and reporting on the investments and cash – creating clarity in the clients mind
- The new investment strategy improved performance AND reduced risk all at the same time