Some of us are highly adept at planning family finances and keeping on top of all things financial. But how many of us can really claim to be playing the ‘long game’ when it comes to thinking about the future?
There are a number of factors involved that you have to consider when thinking about the future of your family. This short guide aims to inform you about some of the things you should be thinking of before a probate minefield becomes the biggest gift you leave your family after your passing.
Plan early on
There’s little point in suddenly announcing to your family that you’re thinking of retiring in a year’s time, or even less. You should let everyone know at least a few years in advance, and then work towards your dream of a financially secure retirement, and get your entire family on board with you.
It takes a long time to set up your retirement income, so it’s definitely worth getting things done ahead of time. Start planning how you’re going to move from your salary to annuity. Your pension company will only act after you’ve instructed them to do so.
Be practical, think about the rest of your family
If you’re the sole earner for the family, you’re going to have to think about extra income for the rest of them. Start thinking about what’s most appropriate and practical for your spouse and other dependents, and think about setting them aside income through your annuity.
You don’t want to make them regret the decisions you’ve made when the probate forms start appearing!
Start cutting housing costs early
Two or three years before your retirement date, you should start saving and cutting back costs as much as possible, particularly housing costs. Rent out a spare room if you can, move to a less-expensive neighbourhood – do whatever it takes to save as much money as you possibly can.
It’s important to agree on your priorities – do you want to live fast and in the moment, or do you want to save it for an easy, comfortable retirement later on? If your answer is the latter, don’t buy that new car, keep your old one, and try and strike that balance between living for tomorrow and enjoying today.
Determine how many years you’re going to include in your retirement plan
Obviously, you don’t want to outlive your savings – that would not be an ideal situation to find yourself in. It’s hard to predict how long you’re going to live, but you can certainly make estimates, and plan accordingly.