After watching her parents freely enjoy their retirement and jetting off on luxury holidays, my client was keen to put her own plan in place for financial freedom.
Both of her parents have investment portfolios and have been seeking independent financial planning advice from MM Wealth for many years, helping them to become financially secure in retirement.
Financial planning review
After reviewing my client’s financial position, I could see that while she had saved a significant amount of cash, it was accumulating untouched in her account at low interest rates. And, although she had built up a small employer pension, she was only contributing the minimal amount.
By increasing her regular pension savings into her employer’s scheme with surplus income, she was able to significantly boost her retirement pot while taking advantage of the immediate tax relief.
My client also received bonuses, which were topping up her cash savings. However, as the funds were not needed, she was being hit with 40% tax on the payments.
We recommended that in future she would be better off sacrificing bonus payments in exchange for payments into her company pension, saving her 40% and the National Insurance Contributions on the payments – an easy way to increase pension savings.
An investment strategy for financial freedom
We also put an investment plan in place. By investing her cash savings into an ISA (Individual savings accounts) and making use of her ISA allowance each year she could build up a flexible savings pot to use in retirement, while also giving her flexibility to access the capital, if needed.
Our retirement planning approach