The starting point for assessing clients’ income needs in retirement is likely to be their current pattern and level of expenditure. However, it is important to make various adjustments to take account of changed needs and circumstances and potentially estimating when changes may occur.

Reducing expenditure needs:

• mortgage repayments;
• pension contributions;
• National Insurance contributions;
• life assurance premiums, although there may be a good reason to continue life assurance cover
• savings,
• expenditure on children,

Expenditure may increase:

• medical insurance
• many clients take extra holidays and travel more;
• expenditure on grandchildren, e.g. covering the cost of school fees; and need for long-term care at some point in the client’s life and it may be prudent to reserve some funds for this purpose.