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Retirement Planning Case Study: Susan & Chris

Posted by Robert Schwarz, Financial Planner

From a high-profile music industry job, servicing artists like Taylor Swift, to experiencing the Big Sur in California, First Wealth ensured that Susan and Chris met their retirement goals.

Susan, 59 years old, and Chris, 72 years old, approached Robert Schwarz, Chartered financial planner at First Wealth, in 2018.

The main purpose of the meeting was to ascertain whether Susan could retire from her senior executive position at the record company, Universal Music Group.

Susan was the main breadwinner in the relationship, earning a salary of £160,000 per annum. Her role at the firm was becoming increasingly difficult due to changes within the music industry including the rise of digital downloads and the dwindling nature of live events. Susan was also keen on spending more time with her partner Chris, who has underlying health conditions.

Robert says: “The interesting thing about Susan and Chris is they both had different ideas of what they wanted to do in retirement, and we [at First Wealth] helped them to realise this.

“Susan initially wanted to embark on travelling to places like South America and Europe and was keen on seeing her son who currently lives in Paris. Her partner, Chris, on the other hand, was keen on a UK staycation somewhere in Dorset!”

Robert adds: “At First Wealth, we use a cashflow modelling tool to project our client’s lifespan to 100 years old. We can then plan the different stages of retirement – simply put, the beginning, middle and end.

“This can help to budget for retirement, which may last 30 or 40 years. In the case of Chris and Susan, they were looking to live on £60,000 a year, so I looked at their baseline expenditure to plan for that sum.”

A Top End Retirement

“Spending £60,000 a year in retirement very much falls into the ‘luxury’ side of retirement. In Susan and Chris’s case they compromised on the travel aspect of their retirement, with visits to California and Paris in 2019,” says Robert.

“Financially, Susan and Chris were in a good place. Susan’s inherited buy-to-let investments in Manchester, which she co-owned with her brother, earned her £20,000 per annum. She also held a personal pension worth £120,000, £25,000 in general investments, £60,000 in cash and £90,000 in an ISA.

“Chris had approximately £10,000 in savings, £150,000 in an ISA and was receiving a monthly annuity and the State Pension. They lived in a £1.5 million house in Clapham, south London.”

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Getting A Plan

Robert says: “In order to plan their retirement income, we carried out a full audit of their financial position as there were various pensions and investments. The clients were not completely clear on the details about what they had and with whom so, in the first instance, we aimed to provide organisation to their financial affairs.

“We then put all that information into our cashflow modelling software along with their planned expenditure. We could then show them how long this was going to last them for and whether they would be able to live the lifestyle they wanted with the assets they had.

“We talk a lot about giving clients clarity – if this is what you want to do, this is how you can do it. So, for Joanne, her end goal was to determine whether she should hand her notice in, and whether they were going to be able to live the retirement they wanted.

“We had to look at Susan and Chris’s cashflow, whether the retirement income they wanted to achieve was ‘doable’, whether Susan wanted to dispose of any of her lettings’ portfolio in Manchester, their savings and investments jointly and individually, any outstanding commitments for their children, perhaps a care plan for Chris in the long term.

“Having been through this process, we gave the clients the confidence to take the next step, safe in the knowledge that they would be able to live the life they wanted.”

Looking to the future

Unexpected “black swan” events such as Covid-19 are difficult to predict in any circumstances. So, when coronavirus struck in February and March 2020, we had a role to play with our clients like Susan and Chris.

Robert continues: “I picked up the phone to ask Susan and Chris how they and their kids were. At First Wealth we don’t hide behind emails. We want to be advisers that people want to get hold of in difficult times. We are very vocal and visible, which is key in difficult times like Covid-19.”

A Happy Outcome

Robert concludes: “The only downside is that both Susan and Chris hadn’t managed to tie the knot as planned, their wedding has been delayed, which would help them in the future in relation to tax planning and legacy issues.

“Getting married is one area that I can’t advise them on as a financial planner! I do feel satisfied that we [at First Wealth] have managed to plan effectively for their retirement and their future.”

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Find Out How We Can Help You

Whether you’re thinking of retiring now, or you simply want to explore your options, we can help.

We can help you formulate a plan for your retirement, use cashflow modelling to establish whether you have “enough”, and help you to maintain the standard of living you want while sustainably drawing your income.

Email hello@firstwealth.co.uk or call 020 7467 2700 to find out more.

This document is Marketing Material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested

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