Phil is a 62-year old accountant who now runs his own business. He lives with his wife Angela in Hertfordshire. He is hoping to stop working in the next few years and decided to meet with a Tilney financial planner for a review of his finances and to check that he would have enough money for the retirement he wanted.
Preparation for the meeting
Before attending the meeting Phil filled out two spreadsheets. The first included all of the couple’s assets, savings and liabilities – for example their pensions and investments, ISAs and other savings accounts, mortgages and Phil’s business account. Phil’s financial planner helped with the process by contacting Phil’s other investment providers for up-to-date account valuations.
The other was a list of all the couple’s current and future outgoings. These included current pension contributions, their outstanding mortgage, the regular expenses they expected for retirement and all other planned expenses like a new car and yearly holiday.
On the day
When Phil arrived at the office his financial planner had already entered this information into Tilney’s cashflow modelling software. This software takes all of these details (and Phil and Angela’s plans for later life) into account and crunches the numbers to forecast how much money they could have in future.
The first calculation showed that they had saved more than enough money to fund the retirement that they wanted – with his current plans he could live to 100 and still leave an inheritance to his children.
After this Phil was keen to run through several different scenarios to see if they could potentially change their plans. Phil wanted to see how differently things might pan out for them if he:
- Stopped working completely next year
- Took semi-retirement, winding down to 2-3 days’ work per week
- Went on more holidays during retirement
- Increased their annual spending by £10,000.
For peace of mind he also wanted to know if they could afford care home fees in future, and whether Angela would be financially comfortable if he died unexpectedly. Phil’s financial planner ran through each of these scenarios with only a few mouse clicks. They also looked at the effect a lower investment return or a fall in the market might have on Phil’s finances.
The financial planner’s recommendations
After spending some time running through different scenarios, the financial planner gave Phil the peace of mind that he was in a good financial position. He could afford to spend more during retirement if he wanted to, and Angela wouldn’t struggle financially if he went into a care home or died suddenly.
As Phil was forecast to leave behind an Inheritance Tax bill when he died, the pair decided to meet again in a months’ time to discuss Phil giving each of his two children a cash gift to help them buy their first houses.
Speak to a financial planner
If you are in a similar position to Phil or would like to speak to a financial planner about your wider finances, you can book an no-obligation telephone consultation. Please call us on 020 7189 2400 or book a consultation online.
This article was previously published on Tilney prior to the launch of Evelyn Partners.