Case study on retirement planning:
How one client achieved their retirement goals

Here is a case study on how one private client used wealth manager Tilney Bestinvest for his retirement planning.

Guides: Self-Invested Personal Pensions (SIPPs)

A case study on an individual planning for retirement

Sam, aged 55, has enjoyed a successful career as an entrepreneur in the technology industry. After years of hard work, Sam has sold up and is now looking to make the most of retirement. Sam is married to Charlie, who retired early to look after their twin daughters.

Sam is seeking an income of £50,000 net of tax in retirement, with an extra £75,000 set aside for each daughter towards their wedding costs or the purchase of their first home. Sam would also like an additional £20,000 per year for the first decade of retirement so that the family can take a number of longer holidays.

Sam and Charlie’s financial situation

The family home is worth approximately £1 million and has no mortgage. Sam and Charlie have assorted pensions of approximately £250,000 with £1.25 million of remaining assets in cash generated from the sale of Sam’s business.

With these lifestyle goals in mind, Sam and Charlie met with a wealth manager to discuss their current finances and retirement plans. The wealth manager ran a detailed cash flow analysis and found that they would run out of money by the age of 84 if they did not take action.

The wealth manager’s recommendations

The wealth manager worked with Sam to create a bespoke financial strategy that would help the family achieve their financial goals. The wealth manager recommended that Sam and Charlie:

  • Alter the gifting strategy for their children
  • Make use of a number of different tax wrappers
  • Use a tax planning vehicle to compensate for some of the tax paid on the sale of the business
  • Revise their pension income strategy to provide staggered tax-free lump sums
  • Restructure their investment portfolio with a strategy more targeted to their risk tolerance

The results

As the graph shows, by acting on the wealth manager’s recommendations Sam and Charlie could achieve their lifestyle goals and enjoy their retirement without running out of money.

If you are interested in hearing more about how a wealth manager can help you have financial piece of mind then the author of this piece, Tilney BestInvest, is offering readers a free consultation. Simply click below to book in a time for them to contact you.

Important information:

This case study is based on an actual Tilney Bestinvest client, but exact figures have been altered. The figures shown are for the client described and compare the difference in projected asset value before and after our recommendations were implemented.

Both before and after examples use the following assumptions: Investments achieve a real return of 3% per annum net of all fees and commissions; inflation of 3%; and current year tax rates. The before example assumes taxation of 40% is applied to non-pension assets, and the after example assumes taxation of 20%. This graph is for illustrative purposes only, and these forecasts cannot be relied upon as an indicator of future performance.

The value of investments can go down as well as up, and you can get back less than you originally invested.  
Prevailing tax rates and the availability of tax reliefs are dependent on your individual circumstances and are subject to change. This article is not a personal recommendation, or advice to invest.

Click here if you would like to speak to a FWM wealth expert now about pensions or preparing for retirement. Alternatively you can click on the banner below to receive your free and tailored retirement report!

Of course, please keep checking out our retirement section of our Insights blog for the latest on what you need to know about retirement planning.

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