Financial Advice & Tips for Older People

Financial Advice & Tips for Older People

There are many financial challenges to navigate in later life, from managing retirement income to planning how your estate will be passed on. However, don’t forget that these are also your golden years, and should be enjoyed to the fullest extent. With careful planning, you can manage your specific responsibilities and circumstances and achieve financial and personal fulfilment.

Hansford Bell is a team of chartered financial life planners based in Tavistock. With a personable approach and a commitment to independent, accurate information, we’ve been helping clients all over the South West take control of their money.

In this blog, we provide some helpful advice and tips for older people managing their finances.

Budget Carefully & Manage Cash-Flow.

Retirement often means a decrease in monthly income. With many of us living for decades beyond retirement age, making sure our funds go the distance is becoming more and more crucial. To do this, it’s important to plan your retirement carefully and try to stick to a spending budget as much as possible. Forecasting your cash-flow over a period of time can help you figure out whether you need to make any significant lifestyle changes to safeguard the longevity of your funds.

If it becomes clear that you do need to cut back, there are some easy ways to access a bit of extra cash each month. For example, why not audit your regular direct debits and think through whether you actually need all of them? A more drastic measure could be downsizing – not only will this free up some cash, but it will make upkeep easier if you become less mobile over time. You could also try and find free ways to enjoy the things you love; avid readers could support their local library instead of buying books. This will not only provide regular opportunities to socialise and interact with your community, but it will also save a bit of money every month – money that can quickly add up.

Manage Investments.

Keeping money in savings accounts is a safe way of doing things, but it also means the interest you receive is unlikely to beat inflation. The result? Savings that decrease in value year on year. By contrast, investing this money with the help of an experienced financial advisor could lead to the generation of valuable returns to supplement your income.

Before you invest, it’s important you take the time to understand your personal appetite for risk. It’s generally advised that whilst high risk investments can be prioritised earlier in life, older people should focus on low risk products like stocks and bonds. Whatever you decide, aim to create a highly diverse portfolio as this will limit the impact of a single underperforming investment on your finances.

Arrange Power of Attorney.

Losing the ability to make decisions is a frightening prospect, but it can happen to many of us in later life. That’s why arranging power of attorney is a sensible way to safeguard your finances and protect your wishes in case of ill health or cognitive decline. Power of attorney is a legal document that allows a specified individual to make decisions on your behalf with regards to your private affairs and finances if you no longer can. It goes without saying, but it’s important to choose someone you trust implicitly to respect your wishes.

Write Your Will.

Planning how your wealth will be distributed when you die is not something to overlook. Your will determines how your estate is passed on and split up between your loved ones, avoiding conflict down the line, making sure your wishes are respected, and providing financial protection for your family. If you do not write a will, your estate will be subject to intestacy. This means the government will distribute your estate according to set rules which cannot be contested even if it means your loved ones lose out.

Finance for Care.

Accidents and illnesses can make care necessary in later life. Whether residential or at-home, this care is likely to place a serious toll on your finances if not properly provisioned for. There are a couple of different ways to approach this, such as ring-fencing a segment of your finances for emergencies or purchasing a health insurance policy. If you’re concerned about planning for potential care, talk to an independent financial advisor about how to get started.

Estate & Tax Planning.

Originally intended to redistribute the wealth of the super-rich, inheritance tax can now affect many of us as a result of inflation and soaring property prices. The current threshold is £325,000, meaning the portion of your estate above this figure will be liable for 40% tax. There are a range of exemptions, though.

For example, if you leave everything above the threshold to your spouse or a charity, your estate will not be liable. Also, if you give your main residence to your direct descendants, your nil rate band can increase to £500,000. There are also many legitimate ways to mitigate the impact of inheritance tax on your estate such as placing money in trusts, maximising your free gift allowances, and taking out a life insurance policy.

Plan Lifestyle Money.

Retirement takes some planning, and our later years can mean making some difficult financial and legal decisions. However, your retirement should also be fulfilling and fun, providing the time and opportunity for you to tick off items from your bucket list, spend quality time with loved ones, and pursue your hobbies and interests. It’s important to set aside money for these activities to make sure you can get the most from your golden years, and lead a rewarding retirement. Whilst planning for what you need is vital, planning for what you want is important too!

Financial Safety Tips for Older People.

Sadly, as we get older, we face greater risk of scams and fraud. During later life, many of us must deal with social isolation or bereavement, cognitive decline, and ill health. These factors alongside unfamiliarity with digital support services can make older people more vulnerable to cyber crime. Below, we provide some top tips for keeping yourself and your finances safe:

  • Use strong passwords unique to each account and enable two factor authentication. This means you will have to provide a password as well as an additional piece of information, making it harder for hackers to decode.
  • Entrust a loved one with account details and the locations of key documents in case of emergency. Make sure this is someone you trust implicitly, and if you’re concerned about losing control of your money, have a transparent family conversation about the situation, what you expect, and what your wishes are in different situations.
  • Never give personal details or sensitive information over the phone. It is unlikely a legitimate company will ask for confidential information in this way. If you have concerns, it is always worth hanging up and calling back on the official company number to make sure.
  • Sign up for notifications with your bank when payments are made over a certain amount or restrict payments to certain locations.
  • Check your credit report and monitor all accounts carefully. If you notice any suspicious activity, you can take action and access support.
  • When making any financial decisions, get the details in writing to review and make sure you have a trusted financial advisor to help you figure out the right steps to take for your money.
  • If you have suspicions about an email, do not click links or open any attachments; this may contain malware or viruses or enable scammers to ‘phish’ for your information. Instead, go to the official company’s website on a separate browser and call to check if the email is legitimate before acting on it.

Financial Planning & Advice for Retirement Tavistock.

At Hansford Bell, we’re passionate about helping older people plan and achieve rich and rewarding retirements.

If you’d like some support navigating the complex world of finance in later life, our friendly team are here to help.

Get in touch with us today!

Note: the purpose of this blog is to provide technical and generic information and should not be interpreted as a personal recommendation or advice. The value of your investment can go down as well as up and you may not get back the full amount you invested.