Can I afford to retire?

In this event, Mike Francis and Martin Holden demonstrate a real client scenario.

Client scenario: Julie and John

The couple are in their early 60s. John is a teacher (salary: £42,000 per annum) and is about to retire and Julie (salary: £102,000 per annum) plans to retire in a year’s time. They’ve accumulated a good amount in pensions and ISAs and expect to receive full State pensions at the age of 66.

John has a teacher’s final salary pension coming in soon and Julie has a small Scottish Widows annuity starting soon as well. They have never invested much, aside from their ISAs, and are cautious with their money.

John recently received a good inheritance from his late mother. So with that in mind, they wondered if Julie could retire at the same time as John so they could spend more of the golden years together. 

Using cashflow modelling

Cashflow modelling is an extremely sophisticated, interactive tool showing clients how their future might look.

For Julie and John, it looked at their current financial situation and planned expenses for the next 20-30 years, as well as allowing for possible house maintenance and them wanting new (and expensive in Julie’s case!) cars.

So can they both afford to retire now? Martin looks at how cashflow modelling helps to answer some of the questions that arise:

• Will they have enough money for average life expectancy as well as a few years longer?
• Would it make a difference for Julie to keep working for those extra 12 months?
• What about their property? Does it hold significant value and would they be able to sell this at a later date and move into a less expensive area/downsize/both?
• Is an expensive car something Julie absolutely wants in future?
• Could they take more investment risk and potentially see more growth? (Risk: you can lose money investing)

A summary note from the speakers

This is a pretty exciting time for clients – sensible assumptions can give people guidance. When people retire in their 60s they hopefully have another 30 years left, meaning retirement lasts longer than it takes to pay off a mortgage in some instances.  

We don’t have a crystal ball, but we can review their financial situation and create a roadmap for the future and change it if needed so they can achieve the retirement they want.

It’s also good to point out that hardworking people tend to leave too much money in the bank at the end rather than enjoying it, so getting advice from a professional using cashflow modelling could help avoid this!

Speak to us

If after listening to our speakers you think cashflow modelling could benefit you and your retirement, or have any questions about the topic, we offer free initial consultations where you can speak to an adviser about your queries.

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