To round off with the Financial Planning Week blog posts from our team, Director and Chartered Financial Planner Amanda Cowie gives her thoughts on financial planning when you are nearing 50!…
If, like me, you are getting near your “special” birthday you maybe can’t believe that you are at this point in your life. I don’t feel close 50 at all, apart from my weekly trip to the physio and now needing reading glasses!
Having decided to change career at age 40 I’ve been a financial planner for over 8 years now and it’s flown by. I’ve always been a bit of a planner though.
My personal situation is straightforward – some might say boring! I’ve been married for over 27 years with two daughters aged 21 and 17. The eldest is at Uni in London with three years to go and the youngest is in the middle of applying for a five-year course.
I would say that our priorities over the past few years have been:
- Sorting out the parasites! We wanted to get our daughters through University where they took Student Loans for the fees only. The only way of doing this for us was to prioritise repaying our mortgage well before our eldest started Uni. It was a bit of a sacrifice at the time but worth it.
- Choices around when we stop working. Getting a plan in place for retirement to understand what level of pension we need to provide us with the income we need at a certain age. This means that in future we have the choice to keep working because we love it (and we actually do) not because we have to for financial reasons. There is an element of sacrifice to this too however, I’d rather make a pension contribution than buy “stuff”.
- Trying to equalise our potential retirement income. This is not always possible for everyone. But when talking to couples it makes sense tax-wise to equalise your “pots” as you usually have joint expenditure needs. No point if the income only comes from one person as we all have individual tax thresholds, which it makes sense to use.
- Building an Emergency Cash fund. When our girls were young we had very little in cash savings. It’s reassuring to now have a buffer in cash when things need done in the house. I’d say try and have about six months’ expenditure in cash if possible.
- Balance Making sure that we had a balance between saving and spending. Our neighbour died of cancer about four years ago and he was a similar age to us with a family. This emphasised to us the need to make the most of now but keep an eye on the future. Have a budget for what’s important to you – for us, it’s travel.
I can’t emphasis enough how essential our financial forecasting software was in helping us put a plan in place. We are very lucky, this is our day to day job and we know how to make this happen. “Real” financial planning is not just talking about investment returns, it’s about helping you articulate what’s important to you and prioritising what you need to do to make it a reality.
Don’t miss the opportunity to book a free 1-hour online chat with one of our qualified financial planners. Email Neil Cowie for a time slot here: firstname.lastname@example.org