In my last blog, I looked at some of the key benefits of Lifestyle Financial Planning. Reduced stress, Peace of Mind, Clarity and a Road Map for your Future were just some of the benefits that jumped out. This week, as promised, I am going to look at a couple of case studies.
Take for example, that of a recently retired couple in their early 60’s, with no kids and who had just sold up their business. Besides their pensions, they now had a lump sum on which they wanted to get a good return to have enough money to live out their lives. To satisfy this requirement, they had spoken to 2 different advisors. Both had recommended adventurous investment scenarios in line with the risk/reward profile given by the clients.
The problem was, unknown to the clients, they were unnecessarily taking on TOO MUCH RISK. After speaking with us, we looked at their overall lifestyle, their needs and requirements. With our experience and using our financial planning software, we were able to run some numbers. As things stood, if they proceeded with any of these high risk investments on offer, and things went well, they’d leave a lot of money behind, and a lot of tax to be paid by someone. If there was a market crash and things went badly, they could run out of money in their late 70’s. If they were lucky, things might just work out ok. But, why take on all this risk and associated stress? There was simply no need. All they actually needed was 0.5% over and above inflation to ensure they would be ok for the rest of their lives. A considered, lower risk investment portfolio, with lower fees and a higher degree of certainty. They took our advice, we implemented the plan for them, and they’ve never looked back. This gave them the peace of mind they had craved. They now enjoy their retirement to the full, without having to unnecessarily worry about the markets.
Or, consider another couple in their 70’s, already enjoying their retirement. And so they should! They had worked long and hard over many years and accumulated some real wealth. They had good income from various pensions, rental income from a few apartment units and some other investments. They were living it up and enjoying their lives.
They were now “Empty Nesters” as their 3 grown-up children had all moved on. They were about to RIGHTSIZE (downscale) from their 5 bedroom suburban home to a nice 2-bed apartment. This property move would soon see another €600,000 going from bricks and mortar into savings. But what did it all mean and could there be any Inheritance Tax implications? Their accountant recommended that they speak with a Certified Financial Planner CFP® and so, they got in touch with us here at Lifestyle Financial Planners.
After doing some work, and running the numbers, we found they had a big problem. They weren’t going to run out of money, but die with too much. Why is that a problem you may well ask? Well, because they already had their fill of paying hefty taxes all their working lives. Tax on everything they ever earned (Tax, PRSI & USC). (Stamp Duty) on every property they ever bought. Tax on pretty much everything they ever spent (VAT). (CGT) on shares and pretty much everything else they ever sold. Property Taxes, Tax, Tax, Tax. But, somewhere in the back of their minds, they just knew there would be more tax. And they were right, there was an even bigger tax bill, waiting down the road!
If they died soon, there was going to be an inheritance tax liability of just over €1 million split between their 3 adult kids. If they lived into old age, this problem was only going to get worse. With a little planning, it didn’t have to be that way. We helped them create a “Gifting & Spending Programme”. We also implemented a plan set up specifically to offset the inheritance tax liability for them. The clients were delighted, a big weight had been lifted from their shoulders. They are now able to manage their wealth in a way that gives them the life they want. They can gradually pass funds down to their kids and grandkids so the tax man is no longer the main beneficiary.
All this is only possible when you understand your number. If you would like to find out your number, get in touch today! We have some other case studies also, on our website at www.lifestylefinancialplanners.ie/case studies. This type of planning can be enormously beneficial for all ages, you’re never too young and certainly never too old.
Lifestyle Financial Planners are amongst a small number of Certified Financial Planners CFP® in Ireland who have invested heavily in education and the most up to date financial planning software. We combine this with our expertise to show you both visually and numerically what your financial future will look like. Remember, Life’s not a Rehearsal. Being on solid ground with regards to your future will give you the freedom to breath. Start enjoying your life to the full and start doing so now. To schedule your free Discovery Meeting consultation, contact Paul today at firstname.lastname@example.org
Please share this blogpost if you think it has been informative or might help someone you know. Remember, all introductory meetings are held entirely at our expense, so feel free to get in touch today to book yours!
Lifestyle Financial Planners offer tax-efficient, wealth management, retirement and estate planning solutions to our clients. Paul is a Certified Financial Planner CFP® and holds a Masters Degree from UCD in Financial Services and Risk Management.
Tel: 096-75951 Mob: 086-8053755, www.lifestylefinancialplanners.ie
The information contained in this article is for general information only. It should not be used as the basis for any form of agreement or advice. We recommend readers seek separate tax and legal advice where necessary. This information does not take into account your own particular circumstances. Investment funds can fall as well as rise.
Lifestyle Financial Planners Ltd trading as Lifestyle Financial Planners is regulated by the Central Bank of Ireland