John & Sarah’s story

How Roxboro helped John & Sarah make the right choices for them during their retirement

How much income is needed?

We worked with John and Sarah using cashflow modelling to estimate their income needs for now and in the future. We calculated that once they were both receiving their state and private pension incomes, their income would suffice. Until this time however, there would be a deficit of around £5,000 a year if John took the local job.

We combined flexibility with a guaranteed income and some growth potential

We were able to draw from Sarah’s private pension early and secure a high rate of immediate income on account of her ill health. This provided an additional guaranteed, and tax-free monthly income.

John also had a private pension that he could access from age 55. However, it didn’t have any flexible retirement features and he would have been forced to buy an annuity. He didn’t want to do this. As he was relatively young, buying an annuity would have meant he would give up the possibility of future investment growth. John would have also needed to decide whether to give up part of his annuity to provide for Sarah if he died before her. This would not have been an easy decision due to Sarah’s health.

Instead, we moved John’s pension to a more modern Flexible Drawdown arrangement that allowed him to access his 25% tax-free cash entitlement in stages. John could draw the balance of £5,000 a year tax free, without cashing in the bulk of his pension. This enabled John to take the local part-time role and spend more time, caring for his wife, without committing his pension fund to an annuity too early. John knew that if he were to die before Sarah she would receive the full value of whatever was left in his Flexible Drawdown plan.

We continue to manage the pension investments held within the Flexible Drawdown plan. John and Sarah’s income needs change every year and we work with them to help them plan their next steps.

Are you trying to decide how best to draw your pension? Book a call now to discuss your options.

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