Proper retirement planning has to take into account all of your life circumstances – good and bad.
A good retirement plan must take into account family, health and anything else that might affect your retirement needs and ambitions. It is naive to think that you only need to think about your financial circumstances, as other factors can make a significant impact on your objectives.
Sadly, people are often reluctant to open up about the difficult things in their lives. It's human nature that people want to share the good news in their lives by shouting it from the rooftops, but want to keep the bad news firmly under wraps. That's natural, but it can be harmful when it comes to talking to your Independent Financial Adviser.
Michael Bradshaw came to us at the age of 54, to explore the possibility of early retirement. We discussed his situation for about 45 minutes, in which Michael confided in us that he wanted to retire so that he could help his wife, Gaynor, care for their disabled daughter, Jane. It was a sensitive situation, but we needed to gather all the relevant facts. Michael was open and honest and, sadly, revealed that Jane would never become independent.
This news meant the conversation took a wholly different course. We talked through wills and, with great care, what would happen to Jane if her parents were to pass away. Without us examining them, Michael instantly knew that his wills were out of date and not fit for purpose. He wasn't comfortable with the guardians, and many of the other provisions had been overtaken by events, meaning they were no longer appropriate.
''We also explained to him a Disabled Person’s Trust, which has special tax treatment.''
We explained to Michael a Disabled Person’s Trust, sometimes called a Vulnerable Beneficiary Trust. It has special tax treatment and can be set up in a person’s lifetime, or in their will. This would give Michael and Gaynor the reassurance that, in the event of their deaths, Jane would be left inheriting money but without the ability to make decisions for herself.
We referred Michael to a specialist so that he could start making provisions. He is in now the process of drawing up new wills and setting up a Disabled Person’s Trust, both of which can be done for a cost of between £500 and £1,000. Once he has done this, Michael can renew the conversation with us about his retirement plans.
When he first came to see us, we started chatting about his retirement. However, that doesn't mean that it was the most important thing for him - the crucial element for him was to get his will in order and then deal with retirement planning. This only came about by Reeves caring for their clients, wanting to help in any way possible and through the most important tool available - talking.
People don't want to deal with too many things all at one time. You can become flustered, feel snowed under and, ultimately, end pushing it all away, so you don't feel pressured. That's why it's essential to work out what is, to you, the most important thing that you need to deal with. Once you have that under control and worked out, other things will start falling into place - and then you can begin to sort out your retirement.
Had Michael not altered his will, it would have been invalid if he had died - placing the onus on the state or the local authority to look after Jane. He is far happier having wills in place and having conversations with people about being Jane’s guardian. He now knows that his and Gaynor’s wishes will be followed through.
Don't keep your cards too close to your chest, don't bury your head in the sand. We will never judge anyone, and there is no need to feel embarrassed or ashamed. Some conversations are difficult, and you may not want to have them. But, in the long-run, it really helps to talk. We're accustomed to having a lot of difficult conversations with clients and we can help – once we know the full story.
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Names have been changed to protect identity. These articles are for information only and are based on specific client circumstances which may be different to yours. No advice should be conferred from the articles. No action should be taken without independent professional financial advice as any actions on your pension may be irrevocable and have a big impact on your income in retirement.