An honest discussion about your retirement plan, quite frankly, pays off

An honest discussion about your retirement plan, quite frankly, pays off

Louise and her children Laura and Jamie.

 

The most recent addition to the Britannia family is Louise Parker, an experienced Authorised Financial Adviser who’s helping our existing clients plan their financial future. One thing that drew us to Louise is that she genuinely cares about her clients. She’s an open book and will share her personal experiences to get her point across. She’s also not afraid to ask hard questions to gain a realistic understanding about how she can help her clients plan for their best possible retirement.

With the permission of David*, one of her clients, Louise shared a recent example where she had to ask some of those ‘hard questions’, and as a result, David’s retirement plan was flipped on its head.

“David’s plan was to start drawing on his Britannia funds at age 60 and use the money to cover his expenses until NZ Super kicked-in at age 65. However, after going through his expenses and calculating how much he would need to draw from his Britannia funds 5 years prior to 65, we discovered his future retirement income would be a lot lower than what he’d like. It became apparent that to achieve the lifestyle David hoped for, he would need to make changes.

To begin the conversation, I delicately pointed out that David should consider working past 60. I focused on the positives – suggested working part-time, closer to home, or consulting – options which might be more appealing than his current full-time, stressful job which requires a long commute.

He was resistant at first, but when I said that the amount he had invested with Britannia was estimated to return just $25,000 per year (instead of his ideal $50,000 per year) he started to consider my alternatives. He became more open to working part-time until 64 because he could see the long-term benefits. It came down to the lifestyle he wanted, and if it meant he had to work a little longer to be able to travel in retirement then that was OK. He gave a huge sigh of relief when he realised that it wasn’t going to be hard continuing to work part-time if it gave him so much more freedom in retirement.

The new plan will see David saving $40,000 per year into a managed fund with Britannia until age 60 and working a further 4 years part time until age 64. His wages will cover his expenses and he will also be able to save a further $10,000 a year from age 60 to 64.

This also means his income in retirement from his Britannia investments has a higher chance of being able to return his goal of $50,000 per year on top of NZ Super instead of $25,000 per year which he was on track to receive had we not made any changes.”

It goes without saying, when anyone gets asked the hard questions, they don’t usually like the answers. But often, it only requires a short-term inconvenience for a long-term gain.

All of Britannia’s advisers are experienced and highly qualified, so if you feel you need an honest evaluation about your retirement plan, contact your Britannia adviser today.

*Not his real name.

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Disclosure Statements for our Authorised Financial Advisers are available on request and free of charge. The Product Disclosure Statement for the Britannia Retirement Scheme is available from Britannia Financial Services Limited.

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