George is married and he is 62 years old. His wife Maria is 59 years old. They have 2 children: Robert, age 31, and Clare, age 27. Both are financially independent. Both George and Maria are considering retirement and they want to have a meeting with their financial adviser to discuss their options. Both have a Medium Attitude to Risk and they have high capacity for Loss. George has a defined contribution pension plan from his work. It is currently worth £1.3mn and he can access this pension when he turns 55. Maria has a Defined benefits pension from her work, and she can access it from the age of 65. Her final salary will be £2k per month and its value will go up with inflation. They have no mortgage or other liabilities. They want to have a nice lifestyle during their retirement and do some extra travelling. They expect that they will need approximately £4k per month to live on. They even consider buying a small holiday property in Spain for approximately £250,000. Please explain to George and Maria what their options are if they want to retire now and which option should be more appropriate for them.

Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
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George is married and he is 62 years old. His wife Maria is 59 years old. They have 2 children: Robert, age 31, and Clare, age 27. Both are financially independent.

Both George and Maria are considering retirement and they want to have a meeting with their financial adviser to discuss their options. Both have a Medium Attitude to Risk and they have high capacity for Loss.

George has a defined contribution pension plan from his work. It is currently worth £1.3mn and he can access this pension when he turns 55. Maria has a Defined benefits pension from her work, and she can access it from the age of 65. Her final salary will be £2k per month and its value will go up with inflation.

They have no mortgage or other liabilities. They want to have a nice lifestyle during their retirement and do some extra travelling. They expect that they will need approximately £4k per month to live on. They even consider buying a small holiday property in Spain for approximately £250,000.

Please explain to George and Maria what their options are if they want to retire now and which option should be more appropriate for them.

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