Are your finances able to keep up with your major life changes?

When you think about financial planning, a lot of the focus is on how you can achieve your life goals with the money you have.

But alongside these goals, another element to think about is whether your finances can keep up when you reach major life changes, both the planned and unplanned.

This is even more vital in later life. Whether you’re at retirement now or you’re already settled into post-work life, you no doubt know that retirement changes the way you need to manage your money.

Your retirement income will typically be lower than that in your working life. So, it’s all the more important to manage the pounds and pence, particularly at times when things are changing fast.

Here are a few major life changes that you may face in retirement when you’ll need to keep a close eye on your finances.

Moving home

In retirement, moving home is more likely to be about finding that “forever home” than taking another step up the property ladder.

As this may be your last move, you need to be sure that your finances are ready to support you. And, as you probably already know, moving can be an expensive process.

Stamp Duty Land Tax (SDLT), estate agent fees, surveyors, conveyancing, and even removal costs can all add up to a bill of thousands of pounds.

Something else you may want to consider is the cost of living in the area you’re moving to. Daily life could be more expensive there, so you may want to factor this into your budget.

Make sure you work out what you can afford before you start making decisions. Otherwise, you may find that your money can’t keep up as you thought it might.

Divorce

While you may not want to think about it, it’s a sad reality that many marriages will end in divorce. And, even if money isn’t at the forefront of your mind at a time like this, your finances are still an important factor to consider.

During a divorce, you’ll need to figure out how to divide assets equally and fairly. This could include savings, investments, the family home, and even pension savings.

Now that you’ll only be dealing with your own finances moving forwards, you’ll also need to work out a new financial plan that ensures you have enough to live the kind of lifestyle you want.

Speaking to your financial planner at this time can be a sensible course of action, ensuring that your finances are stable during what can be a tumultuous period.

Unexpected emergencies

When disaster strikes, it can put a severe strain on your finances. And unfortunately, you can never predict when life-changing events like these can occur.

It could be something as straightforward as your car breaking down, forcing you to take more money from your pension than you’d ideally like to have withdrawn.

Or this could be something even more serious. You may have a medical emergency or become unwell with a long-term illness, perhaps requiring you to pay for long-term care.

Ideally, you’ll have protection in place to cover you in exactly these kinds of events. Whether that’s a fund of emergency cash to dip into or an insurance payout that provides you with income, you need to plan ahead for a rainy day.

It’s important to put measures in place and build a fund before it’s too late. Even if you never have to use it, you can have the confidence to live the lifestyle you want, safe in the knowledge that you have a way to cover yourself in the event that you ever need to.

Death of your spouse

At some point, either you or your spouse or partner will sadly need to deal with your finances by yourself.

This can be an isolating experience, having to manage your money while also grieving the loss of someone so close to you.

It can be incredibly reassuring to know that you’re financially secure during this emotional period. That’s why you need to be sure that your finances are set up in such a way that means you’re both able to look after yourselves independently when the time comes.

Additionally, this is the point where you might have wider financial concerns that really come into focus now that you’re solely responsible for your money.

For example, it can remind you to consider tax planning strategies that ensure your money goes to your beneficiaries, rather than to the government in the form of Inheritance Tax (IHT).

At times like these, the support and guidance of a financial planner can be indispensable. They can help you deal with the administrative side of this difficult time, giving you the space to grieve and be with your family.

Work with us

At Britannic Place, we’re always on hand to help you navigate through the life changes that can affect your finances during retirement.

If you’d like to find out more about how we can support you, please email info@britannicplace.co.uk or call 01905 419890.

Please note

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.