The Wokingham Paper


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Most of us are unprepared for retirement, we know it’s around the corner and we think our finances are in order, but have we made any plans for when it arrives?

The reality is that most of us have not.  We simply have a vague idea of some of the things we would like to spend time doing, as and when we get there.

Where is that fire we had in our youth?

The plans to travel, the dream house we wanted to end up in, the activities we planned to be able to afford.

For the most part, these have dissipated over time so much so that now we just want to be comfortable and have the odd extra holiday.

Do you have a bucket list of things you dream to do?

Why not turn these dreams into reality. Life’s too short, so why not make plans to do them now, when you are fit and able to get the most out of the experience.

It is never too late to take stock, as a recent meeting with new clients demonstrated.

In their early 60s, they believed they had five years to go before retiring but for the fact that they had a £150,000 mortgage. A millstone around their necks, causing them sleepless nights. Was anything else worrying them? No – they confirmed it was the huge mortgage and the monthly cost of making overpayments that was sucking the life out of them.

It was the thought of having to make the large monthly payments that was depressing them, they both agreed it would be fantastic to get rid of it and see light at the end of the tunnel.

What could they do?

Instead of paying the mortgage off over the next seven years, why not clear it now?

As they are over the age of 55, they can draw out all their tax-free entitlement and almost clear the mortgage entirely leaving only £17,500 to be paid off.

All that money they are pouring into their mortgage could go into ISA’s for both of them, so by my calculations they are likely to be better off when they retire than if they continued as they were.

They were uncertain about the quality of advice they were getting from their adviser regarding their pension.

At least their adviser didn’t charge them for advice – good job as they weren’t getting any.

“He changes the funds once a year just before he comes to us for a review; we always thought that was odd.”

A full comparison of their funds and back testing with our sophisticated software indicated that they could improve their performance by 3-4% a year.

Result of the proposed planning – two big smiley faces and “we never thought we would see the back of that mortgage, that takes a huge weight of our minds”.

“We had planned to spend two weeks in Bognor when we retired. Now it looks as though we will be able to change our plans and have the holiday we have always dreamt of in the Bahamas.”

A word of warning – regular meetings and monitoring of investments is necessary over the years ahead, to do all we can to achieve all that you want to.

It’s not possible to come up with a simple solution for every client, but normally we can transform every client’s financial situation for the better.

Past performance is not necessarily an indication of future returns, and future performance is not guaranteed.

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