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 had started to think about retirement, and wondered:
-How much would she need in retirement?
-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 her debt was over €2,000,000.
Looking at Jessica’s position, a few things needed to change. Jessica’s salary, bonuses and stock options were solely reliant on her employer, she had not diversified her wealth. Her current pension was invested in low-risk portfolios which did not reflect her appetite for risk. 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% 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 after pension contributions she started a portfolio that was curated to be high-risk. Jessica didn’t have the time to day-trade stocks herself, so she was best suited to active trading and opted to invest in Goodbody’s Best 8 portfolio. This allowed Jessica to leverage the trading team’s best ideas, sourced from extensive in-house research, and access to the best available opportunities. Her portfolio remained diversified and focused on high growth with each stock position targeting a net client return of 8%+ within 12 months.
Jessica’s portfolio was tailored to serve her needs and her investment goals. 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 better placed – and prepared – for a comfortable retirement in the future.
*Names have been changed to protect client anonymity.