Client Story #1: Life Throws a Curveball

Sandra was nervous.

It was the first time we were going to meet in person, and she later told me she felt more nervous about this meeting than she did when she and her husband Paul had sat down to negotiate the sale of their business for a seven-figure sum. Our meeting was just a coffee chat, with no agenda in sight.

The principal reason for Sandra’s nervousness was that Paul was no longer here. She would be doing this meeting on her own.

Paul was Sandra’s life partner, her trusted confidant in a way that is only possible through the 30+ years of marriage that they enjoyed. Aside from spending their lives together, they had built a very successful business during that time. The business was later sold in what was a successful exit for the founding pair, and that part of the story went entirely to plan.

Sadly, as is often the case, life threw a curveball. Sandra & Paul’s retirement plans – holidaying in Portugal, which they loved, spending time together and watching their grandchildren grow - were curtailed completely following Paul’s terminal diagnosis. Their three-decade retirement plan very sadly only extended to a few short years for Paul and, whilst there were no financial worries, money means very little without the health to enjoy it.

Sandra now found herself in the unwelcome position of having to plan anew. Having to plan for life without Paul. Yes, whilst on paper there was no immediate shortage of cash, there was no plan in place as to what to do with that money. How long it would last, given Sandra’s renewed determination to enjoy the life that she had left, in her words, “for both of us”.

Sandra was referred to me around a year after Paul passed, by the solicitor that had dealt with Paul’s estate.

Whilst it would be tempting to imagine Sandra as the stereotypical 1960s-born woman who relied on her husband to handle the family’s financial affairs, that was far from the truth. As mentioned above, Sandra had co-run a successful business for decades and was a great deal more informed and capable around financial matters than many of her younger peers.

Where she required assistance was around the planning. How to, as one point, structure the family money so it paid her a tax-efficient, inflation-proofed income for the rest of her life. How to plan for a decade of impressive, albeit not ferocious, spending, allowing her to get to Portugal and beyond – she actually did a 90-day cruise, but that’s another story – before winding down the spending in the second and third decade.

So, that is exactly what we did. Over the course of many months, we considered Sandra’s plans in detail, knocked a few ideas around, and ended up in a place where she would enjoy exactly what she was looking for – inflation-proofed (that part is really important. A first-class stamp in 1993 cost 25p. Today it costs £1.10), sustainable income amount every month, in as tax-efficient a manner as possible. Sandra knew where the funds were coming from, she knew what date they would be paid, she knew her expenses in detail, she knew the tax position, she knew the remainder of her money was working hard for her, and perhaps most importantly of all, she knew that the plan was entirely flexible.

Sandra’s desires could, and probably will, change as she goes through retirement. She could decide to spend more, spend less, live abroad, buy a flash car (unlikely in this case, but you never know), or do any number of things. That flexibility was baked into the planning from the start as an absolute necessity.

So, all in all, it’s not the perfect outcome. Life forces us to change our plans all the time, and often the cards we are dealt are not pleasant ones. But in Sandra’s case, she is as well-positioned as it is possible to be in her new situation. She has peace of mind regarding her finances, which is a hard thing to quantify but I presume, for Sandra, a welcome lifting of a burden.

We meet at least twice a year now, in between her trips abroad and her volunteering schedule. We also speak regularly on the phone, and rarely about finance. It is a good outcome, considering where Sandra was when we met. Her confidence has returned with a vengeance, alongside a sharp humour that was understandably absent for a few years. It’s lovely to see and to be a part of.