Case Study:

Clients benefiting from Lifestyle Financial Planning

John and his wife, Mary were referred into Bellwether early last year. John is a medical consultant, age 48 married with 3 kids ages 11 to 16 all in private education. He is working 55-65 hours a week in the public and private sector. Mary does not work but they have a good gross income albeit accompanied with high expenditure. Over the years in addition to the HSE pension John had accumulated a number of personal pensions, various investments, property, deposits, mortgages etc. John suffered heavy losses in the past by investing in geared property funds.

John is time poor and has limited free time to spend with the family not to mention financial planning. This resulted in him feeling fairly stressed. He felt that life was passing him by and an acute lack of control regarding what the future would hold. Over the years he had taken out various protection, investment, savings and pension policies (to meet tax bills) but there was no real thought behind these other than being a product to fill a gap. He believed that this approach was to his detriment when he invested in a geared property fund in 2005. He lost all of his investment.

John also had a number of different advisers specialising in different areas but no adviser had the ability and expertise to bring everything together and show him his overall short, medium and long term standing and options.

HSE & Private Pensions?

John was also unsure what role his HSE and private pension would play in retirement. How they interact with each other and whether he was in danger of exceeding the €2 million lifetime pension fund limit.

Early Retirement?

John and his wife had often discussed the idea of retiring early or reducing his working week when the kids were of a certain age, however, they had no idea of where to start in considering this. Hence, they had just continued on with life without making any plans.

Projected Financial Future

When we met John and Mary we spent a good deal of time getting to know them. What were their concerns, frustration, goals and dreams? We had a detailed look at the various policies they had acquired over the years, their income, day to day expenditure and debt both individually and collectively. The real game changer for John and Mary was that we were able to visually and numerically reflect their current financial position and what their projected financial future looked like in one big picture. By bringing their income, various investments, pensions, rental income and day to day expenditure together we, as John said, allowed them to see the woods from the trees, and make sense of what they had in place and what sort of lifestyle it would and wouldn’t allow them to live.

The clients could see how each of the various policies/assets – i.e. pension plans, rental income, investments etc – would contribute to their expenditure requirements in the short/ medium and more particularly in the long term. This was something that had been lost, particularly with older policies, with the passing of time.

When John and Mary were happy that we had accurately captured all of the affairs correctly they felt a sense of relief and certainly more control. They had not considered goals other than retiring at 65 and sending kids to certain schools. On the basis of their projected expenditure they would be able to achieve these relatively straight forward goals i.e. they would have sufficient resources to live comfortably pre-and post- retirement.

Creating Scenarios

This allowed us to progress to the next stage and revisit our initial conversation about what they wanted their future to look like. We examined a number of “What if” scenarios. Conversation sparked and scenarios were tested around:

  • Retiring at 55 and 60
  • Consider having a private practice only and/ or reducing the working week
  • Downsizing in retirement
  • Paying off debt early
  • Giving the kids a contribution towards a house deposit at a point in the future

Not all goals were achievable, for example retiring at 55 was not feasible but 60 was. In this respect, we were able to project the pension funds available at 60 (5 years early), the value of rental income, investment fund values etc. and how this would meet the expenditure requirements of the family in 12 years’ time.

Lifestyle Outcomes

Our financial planning with John and Mary is ongoing but the initial lifestyle goal that they focused on was retirement at 60. We were able to recommend and implement solutions that would contribute towards this goal. Some of the policies that they had in place were making a positive contribution towards their goal but there were some that need to be tweaked or replaced altogether.

The overriding feedback from John and Mary, however, is that for the first time they have a sense of control over their future. They feel reassured that they are maximising the resources at their disposal to achieve their long- term lifestyle goal. This has given them great peace of mind and confidence in the future.

We are currently working on further lifestyle goals with John and Mary who have found the Bellwether 360O lifestyle planning has had a significantly positive effect on their lives.

Are you in a similar position to John & Mary?

If you would like to learn how our Bellwether 360 service can help you realise your lifestyle goals, book a Free consultation.