Making dreams come true
When I met Jim 25 years ago, his ambition was to buy a camper van when he retired at 65 and to enjoy himself on touring holidays with his wife, Pauline. He spent his working life in the automotive component manufacturing industry and earned a modest, but by no means spectacular income.
Throughout that time, he regularly consulted us and followed our advice and we were able to guide him on pension decisions as he changed employers a number of times, and also with various investment decisions, always with an eye on his ultimate dream. We had regular discussions with him, preparing projections of when he could afford his dreams, until we reached the point about three years ago when it became feasible.
As a result of those decisions and that advice we gave, Jim has been able to retire at the age of 56- a number of years ahead of where he thought possible. Now, he and his wife Pauline can hopefully enjoy their camper van for many years, having brought up their family and seen their children leave home.
His story demonstrates the importance of early planning, focusing on his personal retirement goals and continually reviewing the investments and pension arrangements, taking the risks that are appropriate to the individual whilst understanding the potential pitfalls. If you do that, Jim's experience shows, you don't necessarily have to be a high flyer to fulfil your retirement dreams.
Having said that, Jim, doesn't have the same financial resource as many other early retirees and his choice comes with a certain level of risk. He will run out of money if he overspends, or if the required investment returns aren't made - if this is the case - risks will have to be made with the investments to achieve those returns. There are also external factors out of his control: such as changes to the state pension or taxes. Inflation is also a factor. Over the last 10 years we have got used to low inflation, but history shows us that it doesn't last forever. If inflation does return and Jim's investments may not keep the pace with rising prices, again his plans will be threatened and this needs to be taken into account when planning.
Reeves have looked at these risks with him, he understands them and, as someone with a moderately adventurous temperament, he is willing to take them. We will seek to control those risks by advising him on his spending habits, and by carefully monitoring his investments and constantly reviewing the levels of income that he hopes to generate by the conversion of his hobby of photography into a part-time business.
Jim's story need not be unusual. An ordinary working man or woman can potentially achieve their retirement goals often earlier than expected, if they seek advice, and constantly review it.
If you do have retirement goals, do give us a call and let's see if we can make the seemingly impossible achievable.
It is important that no actions should be taken without first taking advice. Personal circumstances and an individual's appetite for risk means that the advice for one person may not be the same for everyone. The information in this blog or any response to comments should not be regarded as financial advice. Reeves do not advise on Defined Benefit pension schemes. Reeves do introduce a third party specialists in areas of work we do not cover.