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- Rethinking Retirement: Making Room for Three Generations
John and Susan had spent decades building their wealth for retirement. But when life changed, they needed a plan that could change with it and retirement for them meant making room for more.
John (68) and Susan (65) had spent decades building their financial security through workplace pensions, savings and investments. By 2019, retirement was on the horizon and, after years of working hard, they were looking forward to enjoying the next chapter of their lives.
They knew when they wanted to stop working. However what they needed was confidence that their finances could support the lifestyle they had planned both now and throughout retirement.
Their question was simple: are we saving enough to retire?
They wanted to understand how their different sources of wealth could work together, whether they were on track to achieve their goals and how to make the most of their finances throughout retirement.
But, as they would discover, their goals wouldn't stay the same forever.
We started with detailed financial planning rather than focusing on individual investments or products.
Using cashflow modelling, we built a picture of what retirement could look like, mapping their income and expenditure and testing different scenarios to understand how their finances might perform over the long term.
The results were reassuring. John and Susan were on track for the retirement they had planned, their existing pensions remained suitable and no product changes were needed.
When retirement arrived in 2022, the focus naturally shifted from planning for retirement to living it. We structured their finances so that the guaranteed income from their final salary pensions covered their essential spending, while savings and investments could be used flexibly and tax-efficiently to fund the lifestyle they wanted.
This also allowed their defined contribution pensions to remain invested for longer, supporting their wider estate planning objectives.
Then, in 2024, proposed changes to inheritance tax rules meant pensions were expected to become subject to inheritance tax from April 2027. At their next review, we revisited their plan and considered what the changes could mean for them and their family.
We recommended taking £375,000 of tax-free cash from their pensions and gifting it to their children. This started the seven-year inheritance tax clock while also allowing them to pass on wealth at a time when it could make a meaningful difference to their children.
Then life changed again.
The arrival of a grandchild gave John and Susan a new priority. They wanted to be closer to their family and began considering a move to a larger home where they could live alongside their adult children and grandchildren.
Upsizing hadn't been part of their original retirement plan. But their priorities had changed, so we went back to the numbers.
Using cashflow modelling, we tested the proposed move and looked at how the additional cost would affect their income, investments and long-term financial security.
The numbers showed that the move was achievable.
John and Susan used their savings and ISAs towards the purchase, while their defined contribution pensions - originally intended to remain untouched - could now provide a sustainable source of retirement income.
We also reshaped their investment strategy to provide greater stability in the short term while retaining the potential for longer-term growth.
The result was a retirement plan that could adapt to what mattered most to them: making room for their growing family.
Since John and Susan first came to us in 2019, their lives have changed considerably.
They retired. Tax legislation changed. Their family grew. And a retirement plan that once focused on enjoying their own next chapter evolved into creating a home where three generations could spend more time together.
None of these changes meant the original plan was wrong. It had done exactly what good financial planning should do - provide a strong foundation while giving them the flexibility to adapt as life changed.
Today, John and Susan have the confidence to enjoy retirement on their terms, knowing their financial plan can continue to evolve alongside their lives.
Client names have been changed to protect their identity.
Life rarely follows a straight line. Your priorities can change, your family can grow and the rules can change too.
The right financial plan should give you the confidence and flexibility to make the most of whatever comes next.