Every year, Goodbody conducts hundreds of financial reviews for clients and prospective clients – and the most common issues they come across focus on savings plans, inheritance and pensions.
Jessica* is in her early fifties and has started to think about her retirement. In doing so, she’s been faced with many important questions and decisions: is her pension on track? Can she afford to retire early? Here we examine how Jessica found a path towards a comfortable retirement.
Retirement looks different for everyone. At Goodbody, we start by understanding our clients’ needs and goals in retirement, working out how much you’ll need to achieve them, and providing a roadmap for a successful retirement.
Jessica met with a member of our team to discuss her financial needs and investment goals. She asked:
– How much would she need?
– Was her pension on track?
– When could she afford to retire?
Our team assessed Jessica’s current financial situation. She had an emergency pot already set aside and started to look at what she could do with her excess cash. The total of her assets, excluding debt, was over €2,000,000.
While in a good position, a few things needed to change. Her salary, bonuses and stock options were solely reliant on her employer as she had not diversified her wealth. Her current pension was invested in low-risk portfolios that did not reflect her appetite for risk (see also: How Your Personality Affects Your Investment Decisions). Jessica’s primary mortgage was cleared, but she needed a long-term investment strategy for excess cash after her pension contributions.
We broke up all the actions into short, medium and long-term goals. A short-term goal was to sell 50 per cent of her vested stock options and invest in a wider portfolio to mitigate the risk. A medium-term goal was amalgamating legacy pensions to minimise fees and adopt an appropriate risk allocation for her main pension.
In terms of a long-term strategy for excess cash, she started a portfolio that was curated to be high-risk. Jessica didn’t have time to day-trade stocks herself, so she was best suited to active trading to access the best available opportunities. Her portfolio remained diversified and focused on high growth with each stock position targeting a net client return of 8 per cent + within 12 months.
She kept in mind that she would encounter life changes along the way and made sure to keep tailoring her investments to her circumstances. In doing so, she felt prepared for a comfortable retirement in the future.
*Names have been changed to protect client anonymity.
Whether you’re looking to grow, manage or protect your wealth, contact the all-female advisory experts at Goodbody to discover what’s possible for you, or to request a free financial consultation at investmentclub@goodbody.ie.