Peter owns a successful landscape gardening firm and had intended to stop working in 6 months at age 65 when he planned to pass the business to his two sons. Aside from gardening he and his wife, Jane, are dedicated cyclists and followers of the Tour de France. Peter wanted to ensure they could both continue their lifestyle and the cycling tours in retirement but Peter’s pension was significantly lower than he had anticipated due to falling annuity rates.
Peter and his wife subscribed to the RetireEasy LifePlan and in this case study we find out how the shortfall in their retirement income was alleviated.
Age: 64 and 63
Retirement age: 65
Desired Income: £24,000, increasing in line with inflation
Inflation – 2%
General Growth of Assets – 2%
General Yield on Assets – 2%
Home Value: £325,000 – Growing at 0%
Mortgage: no mortgage
Private Pension: Value today £200,000
Growing at 2%
Start age - 65
25% tax free lump sum taken
6% pa drawdown
Peter - £5,000 pa commencing at age 65
Jane - £6,000 pa already started
ISA: Value today £15,000
Growth and Yield as per General Assumptions
Bank Balance: Value today £20,000
Own a landscape gardnening firm valued at £100,000
No income in retirement and no plans to sell
Peter had a number of choices including downsizing his home and selling the business but this would be difficult as his two sons continued to work there. Using their LifePlan, Peter and Jane could look at all these options but they soon found that by continuing to receive a net income of £10,000 p.a. (in this case the income came from the business but it could have come from any other job), the shortfall was deferred until Peter was aged 90, something they both could accept.
Your future may be a lot brighter than you think.
RetireEasy enables you to live the lifestyle you choose.
RetireEasy is the UK’s only independent retirement planning tool. LifePlan gives you an overview of all of your assets – including investments, pensions, savings, business assets and properties – and the income you will receive after liabilities such as debts, mortgages and income tax. It is not just a snapshot, but shows you how your finances will evolve throughout your retirement.
Premium LifePlan not only provides live updates on stocks and fund values, provided by Morningstar, and you can model a Lifetime Mortgage, create and compare up to 3 scenarios of your financial future, radically reduce life insurance costs through a Life Assurance Premium Checker and you can print user-friendly narrative reports.
RetireEasy was established in 2011 and has helped thousands of users to understand their finances throughout retirement and adjust their plans to ensure that their money will last.
You can now include all your additional savings, investments and Pension Contributions between now and your retirement, taking into account increasing these Additional Contributions year-on-year and stipulating whether these are one-off or recurring contributions. As always, you can revisit these projections and change them at any time either when your expectations change, or you have real numbers to replace projections already made.
There are now three additional charts, further breaking down your assets and income.
You can now also download spreadsheets giving you the opportunity to view all of your entered information, and your entire LifePlan in one glance.Sign up now