Ten tips for financial planning in later years
This is not about planning for your end. This is about planning for quality of life later on, free from the bother of worrying about things not done and confident that you have a plan and safety net, just in case you don’t remain on top of your game forever.
There’s no way of putting this comfortably but most of us become a little more tired later in life and reliant on others close to us and around us. To help get the plan in place early on, here is a simple financial planning checklist:
1. Pre-programme and automate your routine financial chores so that transactions continue when you are on holiday or if (heaven forbid) you become unwell – you will be liberating yourself from routine financial housekeeping. You can still keep an eye on things and make changes, as long as you want to and feel able to do so, ideally through technology rather than paper.
2. Plan an information guide or a road map to your financial arrangements for those you might want and trust later to act on your behalf, or your heirs. You will need to organise for this so that it is kept updated and useful. Your guide should tell them the what, why, how and who of your financial actions and if you have moved from paper to the web, appropriate access information and passwords.
3. Have a plan for when and how you will share information about your financial world. How and when will you share the details with your loved ones – regularly from now with updates or at some critical point in the future? Misunderstandings and hurt feelings might happen if you assume they will figure it all out on their own after you are gone.
4. Plan for who will do what. Do you have a financial adviser, solicitor, or accountant – named agents, who know you well enough to work with you on your plan and for your heirs? Such agents could be working together on your behalf without you to lead the way – do they know about each other and should you plan to bring them together? One agent may suffice, but is any such arrangement known and understood by all those around you?
5. Draw up your will. Putting your will properly in place is not announcement of your impending end, it is a sensible lifetime move. A will can be altered by you later on, if your or other circumstances change. As a legal overarching document your will can draw together the outcomes of your plan – the what, how and who of your estate. Without a valid will and arrangements for executors, things could get messy.
6. Organise someone to later act on your behalf. Plan for a future where someone might need to take the reins, proactively support you and manage your affairs. It is very hard, especially for a spouse or an adult child, to feel authorized to step up beyond historical family roles, so this will need to be understood and authorised in your plan. Tell your named agent(s) personally that you want them to step in and help you when it is time.
7. Plan for your own funeral. Pre-arrangements are one of the best gifts you can give to heirs. Your family probably has no clue about the facts necessary for the death certificate or what details might matter to you regarding final arrangements. You could write your obituary, plan the final services and the arrangements for cremation/burial, as well as ensuring that the cost is in your financial plan. Your funeral can be both your celebration of your life and your support for everyone around you.
8. Plan for special bequests. The unplanned distribution of personal possessions can bring joy but equally can be the cause of dismay. There are lots of ways to create unintended consequences of hurt and anger, even with the best of intentions, as well as lots of opportunities to convey love and care.
9. Have a gifting plan. Planning to give away your wealth early to avoid inheritance tax may not be the best reason for doing so. Much better to have a plan which really provides for the family, etc., when they have needs, before it’s too late and if you can afford it.
10. De-clutter your home. Many of us are hoarders and accumulators of the stuff of our lifetime. De-cluttering is emotionally and physically challenging for us, but more so for those we love if we don’t do it ourselves. It is difficult to second-guess what our families and friends will value and appreciate being left for them. We may have to think that what has been important for us may not be for others. At least sharing our intentions to de-clutter could be very helpful.