30 Nov 2024

Who Can We Help: Life Changes and Life Stages

Helping someone to get in touch with us isn’t about helping our firm – it’s caring enough about a friend or someone who matters to you, to help them get the support they need when life changes, or before it changes unexpectedly in ways they can’t control.

Planning is often most powerful in the face of changes – a moment to take a step back and be strategic about life’s direction, and to consider how this can be adopted within your financial plans.

What changes in life might mean someone should take a closer look at their finances?

When you change job – this is a good time to consolidate pensions and review overall investment strategy, to consider whether income is being taken in a tax-effective way (especially if you’re looking at a salary increase or change in reward structure), also including the potential for salary sacrifice arrangements or other pension contributions to mitigate tax.

In times of changing responsibilities – those responsible for dependents, whether children or parents, may need to consider the adequacy of their safety net, should disaster befall one of the household breadwinners or care providers. Importantly, stay-at-home parents who suffer a critical illness or long-term health issues can also lead to significant household upheaval. Every household should also have a clear strategy for insurance and adequate (but not excessive) reserve / rainy day funds to be kept on hand.

Sometimes, we look for a change of pace – for many retirement isn’t a destination it’s a journey from full-time to part-time or reduced commitment. Key to this is cashflow planning to map out what income is required and what savings will be needed to fund full retirement later. It is also prudent not to assume that the timing of these changes are entirely in your own hands – illness or burnout, corporate headcount reduction, even major changes in entire industries, can take us by surprise.

Exit or Sale – for business owners and those with larger family properties, often a key transition point will be when the business or other assets are sold, and careful tax and investment planning will help to maximise the capital available for future adventures.

Considering the decision to step down from work – now that most people are responsible for their own retirement journey (unless they’re civil servants with ample final salary pensions) it is crucial to model and carefully plan the race between death and insolvency once you’re no longer actively earning. This should include accurately incorporating not only inflation and variable investment growth rates in different market environments, but also different spending patterns at various stages of retirement as the capabilities of the body and mind change.

Another unexpected change can be the onset of additional caring responsibilities – when many find themselves looking after or even making legal and financial decisions on behalf of aging parents or other relatives. Careful financial planning can help to preserve the dignity and quality of life of someone you love.

Shaping a Legacy – for those who have secured their own retirement needs, the inevitability of both death and taxes can prompt estate planning to leave a legacy – not only to descendants, but also through charitable giving. Receiving an inheritance can also lend a fresh perspective on your finances. With many now living longer, sometimes that legacy isn’t to middle-aged children, but instead to grandchildren. Different strategies should be considered depending on age, health, and family relationships.

Often, when one of these changes happens, it’s the first time you’ve experienced it. At a time of uncertainty or even turmoil, it can make a huge difference to call on someone you trust, who has supported others through these changes and seen the unique journey that each person and family looks to navigate, in order to align their personal finances with their preferences and goals.

If you would like to discuss any of the above in more detail, please get in touch.