Why did Christine get in touch with us?
In her mid-50s, Christine approached us after a friend recommended she take financial advice after a stressful divorce.
Following the divorce Christine felt confused about her financial future and had no confidence that she would be able to retire on her terms. In the divorce settlement, she had agreed to keep the marital home. This meant she had very few other assets such as investments or pensions, with which to secure her long-term future.
However, Christine did have a pension from her work that she had built up over several years.
How did we help?
We spent a lot of time with Christine, explaining how we work and the process involved with creating a financial plan.
When she was ready we started to produce a plan using cashflow forecasting software. To do this effectively we need to obtain a comprehensive understanding of Christine’s:
- Lifestyle costs
- Planned expenditure
We then started to identify Christine’s key goals for her life over the short, medium and long-term.
Christine wanted to retire at 66 and was prepared to allocate some of her income to achieving that goal. However, our forecasts showed that despite the increased contributions, which would be made via salary sacrifice for increased tax-efficiency, she still wouldn’t be able to achieve her goals.
We considered other options and Christine proposed the idea of downsizing to a smaller property when she reached the age of 65. She reasoned that her children would have grown up and left home by that point and she would therefore have no need for such a large home.
We talked through what kind of house she would like to move to, and the cost. We then added the equity this would release in to the financial plan. Doing so made the difference between Christine being able to afford to retire and having to continue working.
We then implemented the plan, which included reviewing Christine’s existing pension, making the required changes and putting the salary sacrifice arrangement in place.
How did Christine benefit from working with us?
The financial plan we created has given Christine the confidence that she will be able to retire when she wants, with sufficient income to pay for her lifestyle.
We meet regularly with her to review her cash flow model and confirm the plan is still on track.
This is vital as Christine’s circumstances change on a regular basis. However, she remains delighted that for the first time she has a plan to achieve her goals and during the process has learnt more about financial matters than she has done before.