UBS Wealth Way

Prepare for retirement: time for your heart’s desires

On top of her professional responsibilities, Catherine V. has a personal project. In the next few years, she wants to help finance a school in Peru – and travel extensively with her partner. But not at the expense of their pension planning.

Image: Getty

Work, hobbies, partnership: time and again, Catherine V. (51) has set priorities other than pension planning. But now she has scheduled an appointment with her UBS client advisor.

Catherine V. has no biological children, but all the more “children of the heart,” as she calls them. As the partner in an HR consulting and recruiting company, she is in a relationship with her friend Anna S. (42) – and has big plans for the future. She wants to help friends with a one-time amount of 100,000 Swiss francs so that they can open a school in Peru in 2024. She would of course also like to travel there and to other distant countries with her partner.

You can play an active role in shaping your retirement – and even choose when it will begin.

Should Catherine V. be tightening her belt?

To Catherine V.’s surprise, the client advisor at UBS doesn’t start the conversation with key financial data, but instead asks her exactly what her life goals are. How does she envisage her future? Among other things, Catherine V. is toying with the idea of reducing her workload a few years before retirement, but continuing to look after key customers beyond normal retirement age. She is also already thinking about what might happen once she is no longer around. Would it be possible for her to use her assets to benefit the Peruvian school project at this point?

“There are no laws of nature when it comes to retirement,” her client advisor explains: “You can play an active role in shaping it – and even choose when you want to retire.” Anyone who plans the third stage of their lives and the subsequent period when they’re still in their early 50s has a lot of financial leeway.

UBS Wealth Way: thinking finances in three dimensions

To ensure that no aspect of the future or of wealth planning is forgotten, the client advisor discusses UBS Wealth Way with Catherine V. The advisory approach defines the three key strategies of liquidity, longevity and legacy by coordinating short- and long-term life goals. The first thing to do is to take stock of your financial situation. This analysis takes into account all anticipated income and expenses – and reveals income or pension gaps.

Liquidity for today

Maintain your lifestyle

You always have enough liquidity to maintain your current lifestyle, e.g., for:

  • Entertainment and vacations
  • Tax payments
  • Safety margin

Longevity for tomorrow

Achieve personal goals

You use your wealth for the long term to preserve your assets whilst achieving all your life goals, e.g., for:

  • Retirement security
  • Expenses for health and long-term care
  • Purchase of a second home

Legacy for others

Transfer wealth to future generations

You define what is important to you and how you want to help future generations or society, e.g., with:

  • Gifts for your family
  • Philanthropy
  • Wealth transfer to future generations

Chances are you can make your dreams come true.

This is what the client advisor announces after analyzing Catherine’s financial situation. The facts: Catherine V. currently has substantial liquidity, as well as pension fund assets and two pillar 3a accounts.

As part of the liquidity strategy, it makes sense to set aside an “iron reserve” of just under one-third of her annual income. This is designed to cover living expenses, including the rent of her penthouse apartment and any unexpected expenses. “Make the rest of your liquid assets work for you,” recommends the client advisor.

“To optimize your overall financial situation, it’s also worth considering making a purchase into your pension fund.” Besides this, Catherine V. wants to clarify which other aspects cohabiting couples should bear in mind.

Structured consulting approach: UBS Wealth Way

Our proven consulting approach links your current life situation to your short- and long-term goals. Wealth planning comprises three key strategies: liquidity, longevity and legacy.

A plan for every goal

For her clear goals – like donating to the Peru project and traveling – Catherine V. needs an equally clear “longevity” strategy. This will ensure that she can maintain her accustomed lifestyle in the long term.

With the expected income from her investments and her professional activity after retirement, there is nothing standing in the way of Catherine V.’s plans from a financial perspective – and the best thing is that she can invest the remaining funds in the legacy strategy. An investment strategy geared to the long term is ideal for this purpose. “With a long-term investment horizon, any price fluctuations usually even out,” the client advisor points out. This will allow Catherine V. to build up assets throughout her life, which will not only secure the existence of the school in Peru, but also the financial independence of her partner, Anna.

Check regularly that you’re still on course

“There are bound to be surprises in everyone’s life, so you should check at least once a year whether your financial plan is still on track,” emphasizes the client advisor: “Then we can realign the liquidity, longevity and legacy strategies as necessary.”

No matter what the future may bring, Catherine V. is pleased to have addressed an important task in life and to have set off on the right path with UBS Wealth Way.

Wealth Way. The approach to your financial serenity

Benefit from the structured advisory approach to your wealth.

Get in touch with us

A personal conversation is worthwhile. For you and your wealth.