Whether you are a school leaver or a
septuagenarian, financial planning is a vital part of life. However, as you
grow older the factors you need to take into account evolve and change as your
needs mature.
When you are younger, financial planning is
all about the long term future and putting ideas together to make sure you
start edging your way to getting what you want sooner rather than later.
Once you are over 50, although you may have
many things you still want to see and do, you also need to start thinking about
how your loved ones would pay for a funeral, if the worst happened.
We take a look at financial planning for
the over 50s and run through some of the considerations which should be taken
into account.
Pension arrangements
Hopefully you will have been able to
contribute to a personal pension and if this is the case, now is the time to
view what arrangements you have in place and consider whether they would be
sufficient to fund a comfortable retirement.
There are many types of pension funds which
can be arranged
Although the exact value of your pension
fund may well fluctuate in line with the market, it can be helpful to get an
annuity quote so you have an idea exactly how much extra income you can expect
to receive once you stop working. This will help you plan for your future and
decide whether you need to keep a small part-time job or whether you can afford
that around the world cruise you have always promised yourself!
The other factor to consider is whether
your pension fund needs to be moved to a low-risk, more secure investment.
Pensions are considered a long term
investment so investing into a fund deemed as either cautious or aggressive
carries little real risk as there will be time to make up any losses. The stock
market by its very nature undulates but any dips will even out over time so
there's usually no need to get worried by fluctuations in your fund value.
However, once you are nearing retirement,
it's worth considering whether it would be more appropriate to move your fund
to a less-risky investment. This is because if the worst did happen and the
market crashed, you may not have sufficient time for your pension fund to
bounce back before you needed to cash it in. Experts recommend moving your fund
to a low-risk location the closer you get to take your retirement.
Preparing for the worst
No-one likes to think about their own death
but making sure that all the necessary financial preparations are in place
means that your loved ones will have much less to deal with whilst they are
grieving.
Look after your money and it will look
after you in retirement
If you are willing to go that one step
further, you could even make the preparations for your own resting place. An
increasing number of people are opting to pick their own memorial stone and
cemetery – and even paying for it in advance – in order to save their family
and friends from having to make difficult choices at a traumatic time.
You might prefer to leave the actual
wording on your headstone but there's no reason why you can't decide on
everything else. Granite or marble? Polished or pitched? The choices over your headstone can be made in
advance. You can even opt for a kerbed memorial if your chosen cemetery permits
these.
Conclusion
Just because you are aged over 50 doesn't
mean you don't still have a long and fulfilling life ahead of you and free of
the shackles of work, you can finally spend your time doing exactly what you
want.
However, financial planning is just as
important as ever and whether it's making sure your loved ones don't have too
much to do if you were suddenly to depart this mortal coil, or bolstering your
pension fund so that you can have a whale of a time during your retirement,
it's vital to make the necessary arrangements.
By the time you're in your 50s, your kids have probably left the nest and are supporting themselves. You're probably at the highest income level of your career, and can really focus now on building your retirement assets.
ReplyDelete