In this final instalment of our age-related articles, it is now the turn of the more senior members of our communities – all of you in your 70’s and older. This group have some very specific financial challenges, so here are some thoughts on wisely managing your financial affairs.

Stay healthy

A decline in health costs money, no matter what support you get from insurance policies and the state. Your house may need to be modified, you may need to pay carers, you may need to install expensive equipment etc. There are a whole range of areas in which ill health costs money.

While of course this is not fully under your control, do everything you can to stay healthy. Eat well and continue to exercise as much as you can, even a short walk every day makes a difference. Look after your mental health too – maintain social contact with family and friends and keep your hobbies and interests going as much as you can. Staying healthy will be a boon for your finances.

Stay aware

Help yourself make sound financial decisions. When you are making decisions where there are sizeable sums of money involved, do your research. This might be a significant purchase or getting some work done around the house. If you’re not comfortable doing this research yourself, ask a trusted family member or friends to help you - of course we are always delighted to give you our opinion too. There are loads of great resources available on the internet to help you make better decisions. If you don’t know where to find them, ask someone who does.

Unfortunately there are always less savoury characters in our society. There are countless stories of people targeting elderly people in their homes with a range of scams, usually under the pretence of doing some “much needed” work. However this usually results in shoddy work that is hugely over-priced and sometimes results in these conmen stealing from you when given access into your home. Never buy from someone at your door. If you want to, take their number with a view to carrying out your research first. And run this by your family or trusted friends before you actually do anything. If the person at your door is genuine, they will completely understand you taking your time in deciding to buy whatever they are offering.

Claim everything due to you

You probably spent around 40 years working and paying tax, now it’s your turn to receive. Know all of your entitlements and claim them, whether it’s in relation to social welfare rights, free schemes for the elderly or other such supports. You’ve earned the right to these supports!

Continue to invest wisely

This is one area where it’s really important to work with us as your financial planner. We will help you identify what your life goals are and to develop a financial plan and investment strategy to ensure your goals are achieved. Your goals might be around living life to the full for the next 10 years, maybe building a war chest for long-term care later in life or indeed your goals might relate to transferring money in a tax efficient way to your loved ones. In fact you will probably want to consider a whole host of different scenarios and potential outcomes. We will help you look at all of these.

These goals need careful planning and a wise investment approach. Simply locking all of your money up in a deposit account is often the wrong strategy. Get help to identify your goals and to invest wisely.  

Begin wealth transfer now

Wealth transfer is often a tricky area. Apart from the odd gift, people often don’t want to face it “until they are gone”. However on the other hand most people hate the idea that after their death, they may leave their loved ones with a significant tax bill. This may for example force the sale of the family home.

Now is the time to ensure that you leave a lasting legacy and not a tax bill. Planning your wealth transfer should be in train now. There are tax exemptions that allow you to transfer wealth to others while you are alive without incurring a tax bill. Know what is available to you and how you and your loved ones may benefit from a structured estate planning approach. We are the poeple in your corner on this one.

Make sure your wishes are clear

It is your money and for you to do with it as you see fit. Make sure your wishes are crystal clear, irrespective of what the future holds for you. Should the day come where you lose your mental capacity, it is very important that you have an Enduring Power of Attorney in place that will ensure your affairs can continue to be managed as you would wish. Of course, ensure whoever will carry out this role is very clear about what you would want.

Likewise your will should reflect how you wish your assets to be distributed upon your death. As part of this, don’t be afraid to talk to us about death. Trust me, it’ll happen to every one of us! A recent survey in the UK of more than 2,000 people found that 30 per cent of people are uncomfortable seeking financial advice to talk about death. This undermines their financial outcomes as beneficial plans are not implemented.

Also more than half of people aged over 55 haven’t discussed bank accounts, insurance, investments and personal possessions with their family. This reticence to discuss these issues unfortunately stores up challenges for bereaved family members down the road.

At this stage in life, make sure all your financial decisions reflect what you want. A family member or trusted friends can help you with those everyday decisions. As your financial planner, we want to help you to make wise financial decisions to ensure that all of your life goals are achieved and enjoyed.

Let’s make it a real resolution in 2023 to focus together on the big picture when it comes to your finances. All too often, it can be very easy to be dragged down into weeds – in our world that’s the (very important too) world of products, funds and fund managers. Don’t get us wrong, these really matter and need to be discussed, but never at the expense of discussing the bigger picture.

Products, funds and fund managers shouldn’t lead our discussions, as these are the tactical solutions or inputs that are used to help us achieve desired outcomes. It’s the outcomes that deserve our closest attention, as these guide your strategic financial plan. These outcomes can be defined when we consider questions such as,

• What’s important to you in life?
• What does your desired future life look like?
• What do you want your money to do for you?
• What does financial independence mean to you?
• If you got a windfall in 10 years’ time, what would you do with it?

Once we can get clear together on these type of questions, we can then visualise the final destination that you are seeking to reach. Then we build the financial plan to help you get there. This plan in turn sets out those products and funds that are needed to get you there – think of them as simply the vehicles. You decide where you’re going, the financial plan is your map to get there and the products and funds are your means to get there. This is the order of importance of our conversations.

It probably makes sense for us to put a health warning over this at this stage. When we’re focused on where you want to go and what you want your money to do, you won’t see tempting adverts from us promising whopping returns. Because we’ve no control over achieving them. But what you will get is clarity about your future and confidence in achieving it. This will be backed up by a solid and realistic financial plan that will help you achieve your goals. Why do we approach your finances in this way? 

Because what’s important is you achieving the life / experiences that you want and not spending every minute wondering about risk / returns / performance / charges etc. Again, each of these are important, but should not dominate our conversations. Think of it like your new home entertainment system. You don’t spend your energy thinking about the electronics inside and the wiring (think products and funds), but instead you focus on the quality of the viewing / listening experience - the outcome. It’s our role to help you identify your desired outcomes, and then to help you get there.   

Please don’t worry, we also spend a lot of time and use our expertise ensuring that you have the right products and funds in place to help you reach your desired outcomes. After all, these products and funds are the vehicles that will help you get there. So they need to be expertly and carefully selected, and we will guide you through all of your choices. Alongside these, we will continually guide you in relation to your own inputs to the plan. These will probably include your levels of saving and staying focused on your long-term goals. We will help you to shut out the noise and avoid negative reactions to short-term events. We’ll help you stay focused on the big picture.

That’s our goal for 2023.