Later life planning means more than saving for a pension. Financial advisers need to help clients review their circumstances and options, get appropriate cover and plan for the future. Nicola Barker offers her tips on how to approach a later life plan.
Planning for the future, not the past
I’ve just turned 50, which prompted me to complete a personal review of my circumstances and think about retirement.
Interesting word, ‘review’. It implies looking back – seeing how my plans are doing or have done.
But, later life planning is very much a forward-looking process – an ongoing process, where you look to what lies ahead and so you can appropriately plan for it.
Many people save for the future, but how many actually plan for it?
One of the nice parts of working as a financial adviser is helping clients envisage their futures and realise their aspirations.
Let’s assume however, that as a 50-year-old, I’m seeking financial advice for the first time. What should I expect to consider in my later life plan?
Making a will and getting protection
Just in case things don’t go to plan, I need to put some measures in place to protect myself, my assets and my family.
Therefore, the first step in an effective later life plan is to ensure I have a valid will and ‘lasting power of attorney’ in place.
Adequate income or critical illness protection provision will ensure that in the event of illness, my pension can still be funded.
The home is a fundamental asset in the overall later life plan. Like most people, my husband and I work hard to pay off our mortgage. Adequate protection will ensure that if I should die, the mortgage can be paid off.
Goals-based financial planning
At this point, I should note, that I have not stipulated the date at which I would like to retire. ‘Like’ to retire and ‘when’ I can retire could be completely different occasions.
A ‘goals-based financial planning’ exercise would take into account all of my available assets, including my home and sources of income. That way I can assess when I’ll be ‘retirement ready’ and what I need to do to get ‘retirement ready’.
Thinking about long-term care
Fast forward to being ‘in retirement’ and later life planning doesn’t stop. In fact, later life planning is a constant.
The value of financial advice becomes even more important as the conversation moves on to my later years and questions like:
- what does long term care mean to me?
- is it important for me to stay in my own home?
- what support might I need?
- how do I feel about funding long term care?
Leaving a legacy
My later life plan should include plans to pass on my estate as I intended, either during my lifetime or on death. This means thinking about legacy or intergenerational planning – for example, whether inheritance tax might be applicable.
I’m only 50, but we’re all heading in the same direction of travel. And it’s never too early to have later life planning conversations with your clients.
Nicola is a Senior Academy Development Manager, St James's Place Wealth Management and a Chartered Fellow of The London Institute of Banking & Finance. A specialist in professional development, Nicola has worked in financial services for more than 20 years. Over her career she's been part of the ever-evolving retirement space and its inextricable link to later life planning.
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