With busy working lives, it can be easy to assume a healthy savings account and occupational pension are all that’s required to finance our retirement. But as Douglas McCrea explains, a simple consultation with McCrea could reveal significant untapped potential in your retirement income, without taking on undue risk.  

“My clients came to me in their mid-fifties for help in planning their retirement. They were looking to find out if they might be able to retire early, particularly as the husband was no longer enjoying his work. They also felt their bank savings and Cash ISAs weren’t working sufficiently hard on their behalf and wanted to explore ways they could maximise their return, without taking too much risk.”

Douglas’ first step was to do a full financial review with the clients, establishing their assets and liabilities, as well as completing a budget planning tool to identify their current monthly income and expenditure. “Basically,” explains Douglas, “we were looking at all the pieces of their financial jigsaw to see where they currently were.”

The budget planning exercise established current monthly outgoings which were comfortably within the couple’s income. We then agreed on a target monthly income in retirement and set about looking at how we could help them achieve this.

One of the biggest surprises to the clients was the extent of the tax free income available to them in retirement, and they agreed with Douglas that it would be beneficial to receive as much income as they could without paying tax.

Douglas was able to advise on ways to use their tax allowances. Saving tax and increasing the potential for growth meant that the couple could both look to retire earlier than they had originally planned.

The clients received a comprehensive report outlining their financial planning, including their current position and financial resources as well as detailed income projections for their planned life of leisure.  

Douglas was able to recommend they diverted a portion of their current spare monthly cash to a Stocks and Shares Investment ISA designed for growth over the medium to long term and suited to their cautious attitude to risk. “This option is ideal for the clients,” explains Douglas, “as they were able to build up a tax-free sum they could use in retirement, while still being able to access the funds at any time if required. They also had the security of knowing the monthly payments into this ISA account could be increased, reduced or stopped at any stage, without any penalty.”

Douglas and his team are on hand to help the couple navigate their road to retirement, and undertake regular reviews to make sure everything is on track for their target early retirement dates.  

“Although my clients had made some provision for retirement, they didn’t have a clear understanding of the options open to them and how to make their money work harder on their behalf. Giving them a complete picture of their finances and outlining simple steps they could take to increase their retirement income allowed them the confidence to make concrete retirement plans. Armed with their detailed cashflow forecast, and having taken steps to provide for their monthly income, they are now working towards early retirement and feeling positive about their future.”

If you'd like to discuss your retirement plans, you can contact us here or call our offices on 0141 570 1340 and we can arrange a free-of-charge initial appointment.

McCrea Financial Services is Authorised and Regulated by the Financial Conduct Authority. The value of investments and the income derived from them may go down as well as up.