Good morning Dinks. As a financial planner I had a lot of clients in their 30s and 40s. Over the years I have had a few clients who are older and retired, but not too many. My older clients weren’t actually looking for financial planning advice; they were more looking for wealth management, tax efficient and income generating ways to preserve their wealth.
Different age groups definitely have different financial planning needs; after all this is the philosophy behind the entire life stage financial planning concept. As financial savvy Dinks we know that different people at different ages have different financial needs, but is the overall concept of financial planning also dependent upon different age groups?
How are your parents planning for retirement?
Think about your parents for a moment, when they were are age did they seek the advice of a financial planner? I know that my parents didn’t. My parents had two income and two kids and they spent money where and when they needed to and that was it.
Nowadays financial planners preach the importance of planning and saving for retirement, but that was not always the case. Other than a company pension my parents did not start saving for retirement until much later in life. This is not to say that my parents won’t have a financially stable retirement, it is just to say that it was never one of their main financial priorities.
Employer pension plans are also becoming a thing of the past. Not many employers nowadays offer a guaranteed pension plan for their employees that doesn’t not require mandatory employee contributions. My father was luck to be employed at the same place for most of his adult life, this allowed him to retire at 55 years old with full pension benefits. How many of us can say that is a retirement option we have? That type of employee loyalty is a thing of the past and so is that type of benefit.
Will you support your parents retirement?
Some parents are not lucky enough to have an employer pension plan and they were not fortunate enough to have the advice of a Financial planner when they were younger. However they did have the smart idea to purchase a property at a young age and pay it off as quickly as possible.
I have an aunt who doesn’t have a pension plan but she does have a home worth $600,000 that is fully paid for. When my aunt is ready to retire she will sell her home, downgrade to a smaller living space and live off the remainder of her profits.
Maybe your parents will move in with you at retirement, or maybe you will move in with them. It is common for parents to move in with their kids to help reduce monthly living costs. My grandfather lived with my father and I believe that my father really enjoyed it. As a teenager it was amazing to see my father still be seen as a child in my grandfathers eyes.
Photo by angelasdreams