3 Steps to Secure Your Financial Freedom

Insight | by Stephen Kiggins

Securing Your Financial Freedom: A Clear Path Forward

Securing your financial freedom means living life on your own terms. By ensuring that you're financially prepared for the future, you can make key life choices, without compromise - from funding your children's education, to having the means to step back from work when you choose to, with confidence and peace of mind.

With a detailed plan in place to secure your financial freedom,
you can live in the moment, safe in the knowledge that tomorrow is taken care of.

This article outlines three key steps to securing your financial freedom and demonstrates how expert financial planning can help you take control of your future with confidence.

Step 1: Define Your Financial Freedom Target Number

Your ‘Financial Freedom Target Number’ represents the wealth you will need to have accumulated
to sustainably fund your ideal lifestyle by the age that you want to have the option to step back from work.

Key Considerations

At what age do you want to have the choice to step back from work?
Determine the age at which you want to have the option to retire - or potentially reduce your work commitments as part of a hybrid retirement plan.
Where will you choose to live?
As an expat you may be planning to retire in the country where you're currently resident, or ultimately your intention might be to return to the UK - but wherever in the world you choose to live, you’ll need to consider; your initial and ongoing property costs; your day-to-day living costs; ongoing and later life healthcare; and how that country’s tax regime could impact your income.
What lifestyle do you want to maintain?
It’s important to determine how much you will need to draw from your pensions and investments on an ongoing basis to maintain the lifestyle that you envisage.

When you step back from work and at last have time to pursue
the things that you're passionate about, what will this look like for you?
Will you plan to travel the world and tick off experiences on your bucket list
or indulge a longstanding dream to restore a holiday property or a classic car?

What financial commitments do you have?
You will also need to factor in your financial commitments, potentially including funding your children’s (and/or grandchildren’s) education and weddings, and making provision to support any other financial obligations you have.

Forth Capital’s online Financial Freedom Calculator can help you calculate your Financial Freedom Target Number and find out if you're currently on track.

Step 2: Build a Robust Financial Plan

Once you have defined your Financial Freedom Target Number, the next step is to develop a robust financial plan to set you on course to reach it. This involves strategic investment planning, tax optimisation, and risk management, to grow your wealth efficiently and sustainably.

Work with a Qualified Financial Planner

Share your vision and your current financial details with one of Forth Capital's dual-qualified international financial planners in a 'planning call'.

Visualise Your Plan

Using the latest cashflow modelling software, your financial planner will map your projected outgoings and anticipated financial commitments, and overlay your savings and investment income and growth, to simulate scenarios and prepare a robust plan with detailed recommendations for your wealth accumulation and drawdown.

This will encompass consideration of your investment portfolio, your attitude to risk, and structuring your assets to optimise long-term growth and minimise tax.

Step 3: Take Action and Stay on Track

With a clear financial freedom plan in place, the next step is to put it into action.

Once you’re satisfied with your personalised strategy, your dedicated financial planner with the support of Forth Capital’s Client Services Team will implement your plan - keeping you informed at every step and providing you with performance updates on a quarterly basis.

And because financial planning is not a one-time exercise, but an ongoing process that must adapt to changes in your life - such as your income, family circumstances, as well as market conditions - your dedicated financial planner will regularly review your plan with you, meeting at least annually to reassess your financial position, update projections, and make any necessary adjustments.

By continuously monitoring your progress and proactively adjusting your strategy, Forth Capital can help you to ensure that you remain on track to secure your financial freedom.

Case Study

Let’s consider James, a 48-year-old executive living and working in Texas.

James wants to have the option to step back from work by the age of 58 and relocate to France, maintaining his current lifestyle.

James estimates that his annual outgoings in terms of his accommodation in France and living expenses, travel, entertainment, dining out and provision for healthcare will be €144,000^* [£120,000] per annum.

James uses Forth Capital’s online tool to calculate his Financial Freedom Target Number.

James establishes that his Financial Freedom Target Number, giving him the option to step back from work at the age of 58 and sustain his desired lifestyle until the age of 100^**, is €3.4 million [£2.8 million].

James’ Savings and Investments
James has accumulated multiple retirement accounts over the course of his career:

He has two UK company pensions held in Pounds Sterling (GBP) with the schemes provided by his previous UK employers, prior to him relocating to Texas - with a combined current value of £100,000.
He has two 401(k) plans with a combined current value of $250,000 [£195,000] from previous roles held with employers in Texas.
He is contributing to a 401(k) plan through his current employer in Texas – with a current value of $400,000 [£312,000].

James realises that his financial freedom target number is a higher value than his current savings, investments and pension arrangements are currently projected to provide for him by the age he wants to have the option to step back from work [58] - so to address that gap, he realises that he needs to speak to an international financial planner.

To create a plan for James, and bring this to life for him, Forth Capital’s UK-US-EU-qualified financial planner uses cashflow modelling technology to help him visualise the accumulation of his investments and savings up to the age of 58 and to illustrate how he can then drawdown income from those investments to fund his lifestyle from that point onwards.

Financial Planning and Tax Considerations

Managing James’s US 401(k) Plans
James’s financial planner discusses with him the opportunity to consolidate his US 401(k) accounts and roll them into an Individual Retirement Account (IRA). IRAs typically offer a broader selection of investments and lower-cost investment options, enabling his funds to grow unencumbered by the higher fees and charges associated with 401(k)s. IRAs can also offer investments in Euros (EUR), to mitigate James’s exposure to currency risk.

To learn more about optimising your US retirement savings as a British expat, click here.

Mitigating Currency Risk
James’s UK and US pensions held in Pounds Sterling (GBP) and US Dollars (USD) respectively, could potentially benefit from being converted to Euros (EUR) to align with his expenses in France. Currency fluctuations could otherwise negatively impact the potential future value of these pensions over the course of the next 10 years. Since 2001, for example GBP has fallen in value by 24% in relation to EUR. Working with his international financial planner James could mitigate this currency risk by transferring his UK pension funds into an international SIPP held in EUR rather than GPB, and his US 401(k)s into an Individual Retirement Account (IRA) held in EUR rather than USD.

To learn more about managing currency risk and its potential impact on your UK pension if you plan to retire abroad, click here.

Assurance Vie as a Tax Efficient investment and estate planning tool
James could also potentially benefit from an 'Assurance Vie' policy when he moves to France, a flexible and effective investment and estate planning solution; generating tax-deferred growth and providing the flexibility to withdraw funds when needed - as well as providing him with an effective estate planning solution, reducing the inheritance tax payable by beneficiaries.

To learn about the benefits of Assurance Vie as a British Expat in France, click here.

James’s financial planner then creates projections of different scenarios, to show him how making different levels of contributions to his investments and pensions, stepping back from work slightly later, semi-retirement, or introducing an additional passive income stream, and the adjustments to his assets detailed above, could potentially enable him to hit his financial freedom target number even earlier and make a positive impact on the lifestyle he would be able to sustainably afford in later life.

James is now on track to achieve financial freedom by the age of 58, confident in the knowledge that he will have the option to step back from work on his own terms, with the peace of mind that his financial future and financial legacy is secure.

Understanding the Tax Implications of Returning to the UK
James's international financial planner also makes him aware that if he should decide to return to the UK, then they must carefully plan for the implications this could have in terms of his UK tax exposure. Re-establishing UK tax residency could, for example, expose James's worldwide estate to UK inheritance tax (IHT) at 40%, and gains from the disposal of any assets could result in a 24% Capital Gains Tax charge. By working with his international financial planner, however, he can strategically manage his residency status and assets to minimise his UK tax exposure.

To learn more about UK tax-residency click here and to download our Statutory Residence Test Flowchart Guide, click here.

Contact us today to Secure Your Financial Freedom

Your financial freedom starts with a conversation. At Forth Capital, we provide expert advice to help you create a comprehensive, personalised plan to secure your financial freedom.

Contact us today to schedule an initial consultation and together we can make your financial freedom a reality.

* Exchange rate correct as of 4 March 2025 [Source: OFX]

** Research published in the Lancet^† suggests that if life expectancy in developed countries continues to increase at the current rate over the course of the coming decades, then the majority of people born in the UK since 2000 will live beyond their 100th birthday. With life expectancy increasing in this way, a target age of 100 has been chosen for the calculator, as we want to ensure that all our clients have planned with confidence for a future that is sustainable and affords them absolute peace of mind.

^† The Lancet - Ageing populations: the challenges ahead [Prof. Kaare Christensen, MD, Prof. Gabriele Doblhammer, PhD, Roland Rau, PHD, Prof James W Vaupel, PHD] Published 3 October 2009.

This communication is for information purposes only and does not constitute financial, legal, or tax advice. Please schedule a meeting to receive advice on international financial planning and wealth management.