Case Studies

January 13, 2023 | Later Life Planning

Pension Accumulation – Company Director

Background

Our client is a Company Director running their own Limited Company. With large retained profits after years of growth, they approached us to devise a long-term retirement plan. As they are in their early 40s, they felt it was important to start focusing on building a pension pot that is capable of funding most of their pension income.

Our Approach

During our meeting, we would discuss what retirement meant for them. They wanted to ensure that they have maximum flexibility in the way they access their retirement pot in 20 years’ time. This was because they would have other sources of income to support their essential needs. We established that they wanted to ensure they were funding their lifestyle needs – that would be ‘family holidays, social events and shopping trips.’

This led us on to the next steps

Pension Drawdown After analysing their existing position in terms of surplus income, we then worked out what their income goal was but running a series of cashflow forecasts stretching 20 years. This established what their essential needs were and what income sources would meet these needs. Prior to the cashflow forecasts, we established their appetite for investment risk and capacity for loss. Once recorded, we were able to build the cashflow models and investment strategy within the models.

The Outcome

We were able to set up a personal pension that has the facility to provide drawdown in retirement. We established a comfortable monthly amount that would be funded via their business. Not only would this start building the pension pot, but they would also benefit from corporate tax savings, as the contributions act as a business expense. We ensured that the initial investment strategy was suitable for a long-term investor, however this would be reviewed annually. It was agreed to benefit from our ongoing support and review service to ensure they are on track to achieve their goals.