07 / 06 / 21
Financial planning for old age: 5 Prosperous Tips
As we grow older and begin to consider our elder years, it’s important that we take a look at our finances to make sure that we are able to enjoy our later years without money worries.
Your pension plans will have been steadily building over time, but there are further financial planning tips to help you prepare. Our latest article walks you through our advice on this, helping you to build that financial comfort and also ensure that you have something to pass on to your family when the time comes.
Keep track of your savings
If you have multiple savings accounts, pots or plans, it might be worth spending a little bit of time going through these to make sure you know where your money is stored.
There are a few benefits here. The first is that different savings accounts have different terms and conditions, for example, on being able to withdraw your funds. When you retire it may transpire that you need to access some of your savings, and the last thing you need is to be told that you cannot instantly withdraw. So giving a little bit of time to this will help you to keep on top of your progress.
You also want to make sure that the money you do have stored away is working as hard as it possibly can be, for you. If you have accumulated a fair amount of savings over time then you may wish to consider an ISA or investment plan to generate a return that you can use to enjoy your retirement.
Consolidate all of your pension plans into one
Throughout your career you may have had a number of jobs across different businesses, each with their own pension provider and scheme that you have been enrolled onto. As a result, you may have accumulated a series of pension pots across different providers. Pension consolidation means combining all of your pension pots into one.
This helps you to keep track of your pension savings by having all money stored with one scheme. You can also gain access to a greater choice of investments, and possibly pay less in overall charges. It is worth noting though that there may be something called an ‘exit penalty’ when switching out your money from old providers.
This article from Which.co.uk is really useful in summarising the pros and cons of pension consolidation.
It is important before making any decisions regarding your pension that you speak to a trained professional who can give you the best advice based around your personal circumstances.
Carry out a direct debit audit
Do you ever feel like cash is dripping out of your bank account, even though you’re trying so hard to save? The answer can sometimes lie in your direct debits and standing orders. There may be some bill ‘leaks’ that you could do without. By carrying out an audit on your direct debits you can find them, and cancel them.
Open up your online banking and head to your outgoing payments. Scroll all the way back to the beginning of the last month, and then take the time to slowly scroll through, writing down every direct debit and bill that you see. You should have a list of subscription services, account payments, standing orders, bills and fees that leave your account every month.
The next step is to put a mark against the ones you want to try living without, but be sure to check the terms and conditions before cancelling any contracts or subscriptions!
This can really help you to cut out any unnecessary spend and give you some additional money to add to your savings.
Consider making investments
Investments can be a great way to secure a financially stable retirement and allow your funds to stretch that little bit further, providing you invest your money wisely.
The age in which you decide to start investing will greatly impact what type of risk you take. When it comes to investing before your 60s, you may be able to afford to take a higher to more moderate risk in order to get a greater return for your money and build up your retirement funds nicely.
However, if you’re nearing or currently in retirement, it could be wise to choose low-risk investing strategies that will provide a steady return-on-investment. Investing in high-risk assets as a senior could be dangerous, as you may not have time to claw back any great losses.
Holding your money in a savings account may see a little growth with added interest, but looking into low-risk stocks and bonds can be a relatively safe way to steadily top up your funds year on year.
In order to minimise the impact of any potentially underperforming investments, it’s always a good idea to spread your cash out between different types of investments. We’d urge you to always do your research and speak to an independent professional before parting ways with any cash.
Appoint your Lasting Power of Attorney
Planning for later life is about being prepared for the unexpected, what might happen if you are no longer able to make decisions for yourself, either regarding your health or your finances. The best way to plan for this is to arrange your Lasting Power of Attorney (LPA).
This is a legal document which allows you to choose an individual to make decisions on your behalf, when you’re no longer able to do so. Should there come a time in your life where you have lost the mental capacity to consciously make important decisions i.e. if you have had an accident or fallen ill, your chosen attorney will have the legal rights to make those decisions for you.
You have full control over the Lasting Power of Attorney that you appoint, and you can choose one or more people who you trust to make decisions regarding your health, welfare, property and finances on your behalf.
We can help you to appoint and register your Lasting Power of Attorney, through our Estate Planning services. Find out more here.
Make a will
Making a will is a crucial part of planning for later life, and is something that should be considered by adults of all ages. Essentially, the earlier you can write your will, the better.
Having a will is incredibly important, as it determines what will happen to your finances when you die. Not only does this provide peace of mind for yourself that your wishes will be granted, but it offers financial protection for your loved ones.
Without a valid will, your estate will be shared out according to the rules of intestacy, dictated by law. This means that you will have no say over how your finances are distributed, and your loved ones may lose out on potential inheritance.
If you still need to make a will but you’re not sure where to start, our Estate Planning services can help you. Click here to find out more.
Take out a funeral plan
Not only is taking out a funeral plan a great way to ensure that your funeral goes ahead the way you want it, but it’s the best way to protect your loved ones financially.
When taking out a funeral plan, your funeral directors services are fixed at today’s prices, meaning that you won’t be affected by inflation in the future. Securing a funeral plan ahead of time will give you peace of mind, knowing that your loved ones can mourn your passing peacefully, without the added stress of paying for your funeral.
Should you die without a funeral plan in place and no money set aside to cover the costs, your loved ones will be left to pay the bill. With the ongoing rise in funeral costs, this could leave your family in great financial trouble, also known as funeral poverty.
Prosperous Life are one of the UK’s leading funeral plan providers, and offers a range of plans tailored to suit all requirements and budgets. View our funeral plans to find out more, or get in touch to discuss your options.