Is our retire-by-55 dream possible?

The current annual income shortfall between the ages of 55 and 68 The extra amount the couple needs to save each month to be able to retire at 55

However, it would leave the couple with a shortfall of £36,000 until he turned 68, a gap that would be exacerbated if they dipped into their savings to purchase their “forever” home. To resolve this 13-year gap, there are a few solutions.

Broadly, the couple need to save a further £800 per month from now until 55. If invested through an Isa, assuming a growth rate of 5pc per year but accounting for inflation, this would give them £265,000 after 22 years. Combined with the £600 per month they already save into an Isa, which would be worth £210,000 using the same growth and inflation assumptions, they could then draw down on this at a rate of about £30,000 a year until they turned 68, even if they needed to dip into their savings to buy their dream home.

The £800 could also go into a private pension or into Mrs Smith’s workplace pension – the more taxefficient option as it would keep them The couple only has this amount in cash savings – which is too low, an adviser says both basic-rate taxpayers.

Mr Smith also has the option of topping up his own Army pension, to a maximum level of an additional £6,500 of income a year. However, this might mean he exceeds the lifetime allowance, because his pension might pay out more than £50,000 a year.

For the dream house, there is still an estimated shortfall of £200,000 after the sale of their current home, assuming the mortgage has been fully paid off using rental income by the time the previous home is sold.

Presuming they do not want to take out a mortgage at this stage, the purchase could still be funded from the home sale, pension lump sum and some of their Isa savings while still achieving a £60,000 annual income. If you’d like to be considered, please email money@ telegraph.co.uk with the subject line “Give me a Money Makeover” and provide the following information:

Your name, age and telephone number (we will not share this with anyone);

Your main financial goals (in as much detail as possible please), details of any debts (including mortgages) and how you would describe your attitude to investment risk;

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risk now, as their planned retirement is over 20 years away. An investment Isa entirely in geographically diversified shares is appropriate.

The majority of their wealth is in Mr Smith’s name and Mrs Smith does not have any investments in her own name, aside from her Army pension. If they were able to equalise their investments and generate £30,000 post-tax income at retirement, they could make better use of their personal allowances (the amount you can earn tax-free) and would likely be able to remain basic-rate taxpayers.

The couple only hold £4,000 in cash, which, given their expenditure, is quite low. It is generally a good idea to hold between three and six months’ regular monthly expenditure in cash.

Given that Mr Smith is the only one bringing a full income into the family at the moment, this is particularly pertinent and should be built up at the couple’s earliest opportunity in case of an unforeseen loss of income.

Ashley and Jenny with their newborn son