Nostalgia “ain’t” what it used to be. We can all say that about the time we were kids and fortunate or not, I was brought up in the swinging Sixties – when the leash was off, sex, drugs, rock and roll had replaced austerity and rationing, The Beatles changed music and our outlook on life, as did a number of equally memorable world events.
The Cuban Missile crisis followed by Kennedy’s assassination (and yes I can still remember that day in November 1963); the late, great Bobby Moore lifting the World Cup in 1966, shortly to be followed by those immortal words as the decade closed, “one small step for man, one giant leap for mankind”.
It is a quirk of maths that children of the 60s are now in their 60s. Sir Alf Ramsay’s eulogised team has just three of the eleven still alive (at the time of writing). Some were taken from us all too early and many have succumbed to that terrible disease of dementia. The lesson here is that it is never too early to start planning for the future, and nor is it ever too late.
This grey-haired time of life is when a lot of financial commitments might come to an end, such as mortgage and life assurance and the unforgettable costs of bringing up children; grandchildren could be making an appearance instead – but they go home at night. The state is at last repaying dues through the state pension even though the concept of retirement is not as binary as it used to be. The state pension is moving to a universal payment age of 67. More of us will continue working past this milestone, whether through need or desire.
How to fund your lifestyle once you have stopped work is the challenge facing most people in their 60s. Managing income needs in a low interest rate environment requires careful planning, and for those with private money purchase pensions there will be very important decisions to make. If property downsizing is desirable or necessary capital that is released may need careful investing to meet future needs or objectives. Issues about passing on your assets to the generations below are more in focus as are thinking about the time when you may not be able to make decisions for yourself and/or you will need looking after. Why not bring some order to what might have been opportunistic and even unplanned savings, investments and protections plans in the past?
At this age you may be moving to a period of spending rather than accumulating but it is still not too late to keep saving and make allowable pension contributions. A well-planned roadmap is at least a good start to ensure you are well placed to enjoy the years ahead. Here are, in true 60s ‘Thunderbirds are go’ style, five top tips to consider:
Five – Make sure your Will reflects your current circumstances and wishes; align your pension scheme nominations and those of any life policies at the same time so all your bequests are joined-up. Your financial adviser should help you consider these as part of an annual review. Everyone in their 60s should have financial and welfare Lasting Powers of Attorney (or your equivalent if you live in Scotland or Northern Ireland) too. A solicitor should be your first port of call.
Four – Plan your income and expenditure needs now and into the future. You will need help in making sure your income is as tax-efficient as possible and this might lead you to take worthwhile advice about how to get the best from your private pension plans and ensure any state benefits you may be entitled to are claimed. There might be old investments and pensions from previous employments that you have forgotten about. Some older pensions may not offer the more recent flexible benefit options and could even have higher charging structures, so it is worthwhile spending some time making sure you have everything to hand.
Three – If you have not already done so, start to think about organising your affairs so that on your death any Inheritance Tax is minimised. Not everyone has this objective but most do. Those left behind can sometimes be heard saying “why didn’t they take advice?” At this stage in life, you will start to get a clear idea of what, if any, liability there might be. If you are planning on gifting then keeping a permanent and full record of gifts is one very important aspect but there are many other areas to consider such as trusts for any grandchildren.
Two – Use any excess capital you have or may have to reduce your debts to a minimum or better still to nothing. It is the time of life when there may also be the possibility of receiving an inheritance. As you move towards retirement you will have more time on your hands, you will have different expenditure patterns as well as the prospect of having to fund fees for care later in life. But above all you will want to have fun and be in control at this stage of your life.
One – Make your affairs as easy to manage as possible so you can enjoy the spare time age brings. Take advice on consolidating investments such as private pensions and Individual Savings Accounts (ISAs) and if this is the right course of action for you there will be less paperwork, fewer decisions, and more time for the activities you love; look at the benefits of having an independent expert actively manage your investments and likely income needs. They should ensure you only invest in what you feel comfortable with, that you understand what you are investing in and the risks involved.
There is plenty to think about as you move through your 60s. Family, health, the future and finances will be high up on the list. It does not matter whether you are wealthy, comfortably off or just getting by, everyone will have different circumstances and it makes good sense to work out a realistic financial plan for your own family’s situation. This is a task easily put off for any number of reasons. There are experts available who can help you whether or not you find the subject overwhelming, at the bottom of your list or just boring!
At Mattioli Woods we say that the sooner you can be prepared, the better prepared you will be. Investing time now and ensuring that you have the chance of a standard of living that is of your choosing will give your money a chance of outlasting you. It is not pleasant the other way round! Contact us for an initial meeting at our expense, today.