Simon is the son of an existing client who we have advised for many years.
Typical of many people of his age, he has several pensions, six to be precise, accumulated from various jobs over the years.
Simon won’t mind us saying that he paid very little interest to his pensions. He had no idea whether they were likely to provide an acceptable income in retirement. Nor did he understand how much risk he was taking, whether it was enough, or too little, how much he was being charged or how his pensions were performing.
We met with Simon and early in our conversation explained that his State Retirement Age is 67. This came as a bombshell as his job involves very heavy manual work, which he is unlikely to be able to do until he is nearly 70.
This simple fact focused Simon’s mind on his future and the importance of planning for a time when he will be unable to work.
In short, a plan.
We started by gathering information on Simon’s existing pensions, including a forecast of his State Pension. But, we spent even more time talking to him about his objectives; when he wanted to retire, how much income he needed and the sort of things he wanted to do when he’d finished work.
We then assessed his existing pensions, looking at the level of risk he was taking, their charges and performance and whilst these are very important considerations, so was developing a realistic plan to help him retire at 55.
Having a plan is key. Without one, you can have all the pensions in the world, but you will never know if you are on track for the type of retirement you want.
How the client benefited from our advice
Simon was lucky, our conversation about the State Pension focused his mind and kick-started him into taking retirement planning seriously.
Taking financial advice when you retire is important, but there’s only so much we can do if you’ve not put enough away whilst you were working. That’s why it’s so important Simon came to see us when he did.
He still has many years of work ahead of him, so we were able to put in place a plan which will help him retire early and avoid heavy manual work into his 60s.
The moral of this case? Plan early and plan well.