Guidance. Reassurance. Inspiration.
Ready to change your focus, but need your retirement finances to stretch that little bit further? Take a look at how we helped Mr & Mrs W re-jig their savings to fund early retirement whilst ensuring their pension pots continue to grow.
Meet Mr & Mrs W
At the age of 57 & 55, this lovely couple were ready to retire from full-time work. They were looking forward to downsizing their home and moving to a new area. The challenge was that Mr W had Defined Benefit Pensions, but those wouldn’t kick-in until he turned 60. The couple’ s other personal pensions and state pension allowances also couldn’t be accessed for a few years and they had no other significant savings to draw on. So, the couple came to us for advice on how best to bridge the gap.
Meeting short-term needs
Firstly, we looked at Mr & Mrs W’s existing personal pensions. We recommended amalgamating them all into modern contracts that were flexible enough to meet their short-term needs and bridge that gap of a few years.
The couple were soon able to start drawing a tax-free income from these new pensions, funding their immediate living expenses and the renovation of their new home, without adding to their tax bill.
When Mr W turns 60, his Defined Benefits scheme will then start paying out and the couple can simply reduce the withdrawals they have been making from their personal schemes.
Making the money go further
To help Mr & Mrs W stretch as far as possible the remaining equity from their home and the income from their existing investments, we set up an investment model that allows them to gradually move all this money into tax-free accounts. Their existing investments were placed into an ISA wrapper, limiting the amount of Capital Gains Tax that would be payable. Then the residual equity was placed into two General Investment Accounts.
Now, each year, the income from these investment accounts will be put into new ISA’s, making full use of the couple’s Capital Gains Tax and ISA allowances and creating nicely ring-fenced pots of tax-free income for the couple to use in the future.
We continue to support Mr & Mrs W, giving them regular advice on their short-term money management and longer-term retirement needs. It gives us great satisfaction to help this couple make their money go further, so they can enjoy life just that little bit more.