Video Series:
- Financial Planning in Your Early Years
- Financial Planning in Your Middle Years
- Financial Planning in Your Later Years
Transcript:
Alanna Petroff: Welcome to the second instalment in a series of videos about financial planning at different life stages. Now, we're going to be looking at the middle years, and how to plan during that time.
So, Nick, let's go over financial planning in the middle years. What does that look like exactly?
Nick Cann: Okay. Well, I'd like to think of myself somewhat still in the middle years. So, I can speak with a little bit of experience here. You're in a stage where you're perhaps coming senior in your job, you have children, you have a house, other responsibilities. You're starting to think a little bit more about coming into retirement and what the future might start to look like.
So, it's really important to get a handle on where you are in your personal balance sheet. If you’ve been successful, you've looked at your income and expenditure, you started saving monies, you had a variety of strategies I imagine in different areas to invest, and to save in pensions. You have various life insurances and everything there, but it's now starting to get really important to focus that down to a financial plan to understand fully where you are, how likely you are to be able to retire when you'd like to retire or to do other challenges in your life, where there's things around other important aspects of your family, and other areas are also taken care of.
So, middle years is really important to start making sure you really are on track to have the later years in good order. Because you don't all of a sudden want to panic around 55, 60, and think ‘I really haven't got enough. I [wish I had been] able to take some positions earlier – in earlier years.’
So, having that plan in place, making sure that you're giving yourself the best opportunity for next 30, 40 years is the most important thing for me and looking at that personal balance sheet and having an assessment of where everything is, and how likely it is you are to achieve important things in the future.
Petroff: What about planning for your parents as well because many people are having longer life expectancies. How would that play in?
Cann: Well, that's a really very real consideration for people: it's called the “sandwich generation.” We are in the “sandwich generation” now. We’re not eating them, but actually being in the middle of having young people, young children, universities, the cost of going through education, and whether you need to help children get on to the ladder for housing, and all those sorts of things, and equally that your parents are living longer. Therefore, you'd almost be coming into a situation where your parents are reaching 80s, 90s, possibly need help with care or coming back to perhaps live with you. So, you've got responsibilities at both ends, as well as trying to achieve your own goals and objectives. It's causing people really issues, both psychological and everything else, to make sure that there is enough to go around. Hence again the need to have that plan, and have an understanding of what is available and achievable because it becomes very much more emotional than it is financial perhaps to start with.
Petroff: So, perhaps writing down what your ultimate goals are would be useful in terms of, you could write down short, long and medium-term goals?
Cann: We can do that. We can set out goals ourselves, but we're not very good at it. I think, sometimes you do need that element of coaching or support or advice to challenge you a little bit on what it is that's really important, and to be able to do it as a couple, if you are a couple, or as a family, as a family. So they are actually real achievable and that actually can stretch you in some cases to want to achieve it because we also want to be happy and we want to live long. Good. But it's got to have some meaning that people can sit behind and plan specifically towards, but yes, ultimately there would be short, medium, and long-term goals that you can start to plan around.
Petroff: Okay, great. That sounds good. Thank you very much. That was Nick Cann from the Institute of Financial Planning.
