Finance

As you sail into your 50s, it becomes pivotal to consider your financial strategy. Life has likely found a steady rhythm by now. Children have probably taken flight, becoming financially self-sufficient, and the idea of reducing work hours or even retiring completely starts to surface.

Each person’s life journey is unique and has different resources and challenges. However, there are shared goals and steps that one can take during this stage. Knowing where to begin can be daunting, whether you aim to maximise your earnings or lay down a robust financial plan.

Financial Planner, Gary Davies talks through the steps you can take to find out if you’re financially ready to retire.

Maximising your earnings or laying down a robust financial plan.

As you sail into your 50s, it becomes pivotal to consider your financial strategy. Life has likely found a steady rhythm by now. Children have probably taken flight, becoming financially self-sufficient, and the idea of reducing work hours or even retiring completely starts to surface.

Each person’s life journey is unique and has different resources and challenges. However, there are shared goals and steps that one can take during this stage. Knowing where to begin can be daunting, whether you aim to maximise your earnings or lay down a robust financial plan.

Finding the balance between cash and investments

The key to financial stability lies in balancing cash and investments. It’s generally advisable to have an emergency fund that can cover three to six months of living expenses and any planned spending. This provides a safety net for unexpected events like job loss or significant sudden expenditures. However, the exact amount depends on factors such as employment security and expense levels.

While it may be tempting to hoard cash, having too much idle money is only sometimes the best strategy. For long-term goals, investing can offer the opportunity for your money to grow and outpace inflation.

Boosting retirement savings with higher earnings

As you enter your 50s, retirement planning should take centre stage. This period often comes with increased earnings, which, when channelled towards pension contributions, can yield extra benefits from tax relief. Determining how much capital you’ll need for the rest of your life can be challenging, but tools like pension calculators and cash flow modelling can provide guidance.

If your income has increased compared to in your 30s or 40s, consider using the extra money to accelerate your retirement savings. This could be in the form of additional pension contributions, with options like a Self-Invested Personal Pension (SIPP) offering flexibility.

Understanding State Pension forecasts

The State Pension forms a significant part of most people’s retirement income. Yet, there’s often confusion about its specifics. In your 50s, it’s crucial to understand the rules for qualifying, how much you’ll receive and from what age.

You can obtain a State Pension forecast from the government website

https://www. gov.uk/check-state-pension, which helps you understand how much you could get and how to increase it. Monitoring your National Insurance (NI) contribution record is also essential, and you can fill any gaps in contributions from the last six years through voluntary payments.

Weighing mortgage payments against investments

Deciding between paying off your mortgage or investing the money is a personal decision that involves considering factors such as your risk tolerance, financial goals and tax situation.

If you’re risk-averse, you may prefer to pay off your mortgage quickly for peace of mind. On the other hand, investing could provide higher returns, especially for higher rate taxpayers making pension contributions if you’re open to taking some risks.

Downsizing could also be an option if you own a large home. This could free up equity to fund your retirement and reduce maintenance costs.

Planning for succession and inheritance tax

As you age, it becomes increasingly important to plan for the future, particularly regarding passing on assets and managing Inheritance Tax. Even those who aren’t exceptionally wealthy may be subject to this tax. Inheritance tax is levied on the value of an estate upon the owner’s death, but there are ways to reduce this liability, such as making gifts or setting up trusts. Ensuring your Will is updated to reflect your current circumstances is also crucial.

For further information or personalised advice related to financial planning in your 50s, don’t hesitate to get in touch. We’re here to help guide you through this critical stage of your financial journey.

In our upcoming webinar on 7th December ‘When can I retire?’, our expert Financial Advisers

Gary Leftley & Amy Burge showcase the steps you can take to calculate just when and how you can retire and if you can retire early.

Register to join Gary & Amy and take this opportunity to ask the experts your retirement planning questions.

Interactive Q&A Session: You can send your questions before the event, or ask them all on the day.

To sign up, click here: https://www.eventbrite.co.uk/e/ask-the-financial-adviser-when-can-i-retire-tickets-706651061347?aff=Website

In our upcoming webinar on 7th December ‘When can I retire?’, our expert Financial Advisers  Gary Leftley & Amy Burge showcase the steps you can take to calculate just when and how you can retire and if you can retire early.

What will you learn on this free 30 minute webinar?

• Debunk the common pension and retirement myths including

– Do I have to wait until State Pension Age to Retire?

• Show you how to calculate when you can retire before State pension age and look at

– Your retirement plan

– The actions you can take to close any retirement income gaps

– Understanding your pension options at retirement

– How to get rid of any guesswork or crystal ball gazing – we can show you how to plan your retirement

Register to join Gary & Amy and take this opportunity to ask the experts your retirement planning questions.

Interactive Q&A Session: You can send your questions before the event, or ask them all on the day

About the Speakers

About Amy Burge

About Gary Leftley

Click here to sign up:

https://www.eventbrite.co.uk/e/ask-the-financial-adviser-when-can-i-retire-tickets-706651061347?aff=Website 

In our upcoming webinar on 7th December ‘When can I retire?’, our expert Financial Advisers

Gary Leftley & Amy Burge showcase the steps you can take to calculate just when and how you can retire and if you can retire early.

To find out more about Amy, head to her profile:

About Amy Burge

To sign up for the webinar, click here: https://www.eventbrite.co.uk/e/ask-the-financial-adviser-when-can-i-retire-tickets-706651061347?aff=Website 

Join Carl Hasty and Rebecca Davison (Director & Head of Tax, Parsons Chartered Accountants) for a free 30 minute webinar ideal for business owners and Directors.

Webinar: ‘Building, Protecting & Passing on Your Wealth’

Date: 22nd November

Time: 1pm

To sign up for Carl’s webinar ‘Building, Protecting & Passing on Your Wealth’, click here: https://www.eventbrite.co.uk/e/building-protecting-passing-on-your-wealth-tickets-737099242677?aff=Website

In our upcoming webinar on 22nd November ‘Building, Protecting and Passing on your Business Wealth’, experts Rebecca Davison and Carl Hasty will showcase the steps you can take to transfer your business wealth in the most tax efficient way.

What will you learn on this free 30 minute webinar?

• How to use company pensions to maximise tax efficiency

• Tax effective exit & succession planning

• Smart investment options post business sale

Register to join Rebecca & Carl and take this opportunity as a business owner to ask the experts your wealth transfer and tax questions.

Interactive Q&A Session: You can send your questions before the event, or ask them all on the day

About the speakers

About Rebecca Davison

About Carl Hasty

Click here to sign up: https://www.eventbrite.co.uk/e/building-protecting-passing-on-your-wealth-tickets-737099242677?aff=Website

In our upcoming webinar on 22nd November ‘Building, Protecting and Passing on your Business Wealth’, experts Rebecca Davison and Carl Hasty will showcase the steps you can take to transfer your business wealth in the most tax efficient way.

Building, Protecting & Passing on Your Wealth

Sign up to our free webinar 

Wednesday 22nd November, 1pm

To sign up click here: https://www.eventbrite.co.uk/e/building-protecting-passing-on-your-wealth-tickets-737099242677?aff=Website