Financial Planning for the over 50s

Whether a school leaver or a septuagenarian, financial planning is a vital part of life. However, as you grow older, the factors you need to consider 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 ensure 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.

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 while 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 have their memorial stone constructed by a stone mason and pick their own cemetery – and even paying for it in advance – to save their family and friends from making 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 curbed memorial if your chosen cemetery permits these.

Pension arrangements

Hopefully, you will have been able to contribute to a personal pension. 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 that 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 know 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 in a fund deemed 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. 

If the worst did happen and the market crashed, you may not have sufficient time for your pension fund to bounce back before you need to cash it in. Experts recommend moving your fund to a low-risk location the closer you take your retirement.

Conclusion

Just because you are 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. Whether 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.