Money lessons worth passing on – Part 3: In your 60s

By the time you reach your 60s, it’s easy to look back and wish you’d saved more into your pension or made different financial decisions along the way.

While hindsight is a wonderful thing, dwelling on the past won’t change it. Instead, focus on the decisions you can make today, because there are still common mistakes that could affect your financial future.

Giving too much money to family too soon

As younger generations struggle to buy homes and shake off student debt, many parents want to help financially, particularly if doing so could also reduce a future inheritance tax bill.

However, giving away too much too soon can create problems of your own. You could find yourself delaying retirement or living on a pension income that falls short of the lifestyle you had hoped to enjoy.

If generosity isn’t planned carefully, parents may find themselves taking on debt, releasing equity from the family home, underfunding their pensions or carrying a large mortgage into later life.

All of these can restrict your financial freedom at precisely the stage of life when you hoped to enjoy it most.

Rather than giving children or grandchildren their full inheritance early, you may wish to consider taking a phased approach. A smaller gift now, followed by a review of your own financial position in a few years’ time, may allow you to provide further support without compromising your own long-term security.

Not managing your pension

There may still be time before you retire to review your pension and consider your available options. It’s tempting to become more cautious as retirement approaches, and reducing investment risk can be sensible to help protect your savings from market volatility.

However, becoming too cautious too early can also reduce the opportunity for further growth during what may still be several years before retirement.

That’s why regular pension reviews can help you assess whether your investments continue to support your retirement goals and reflect your attitude to risk.

Retiring without a clear pension strategy

When retirement finally arrives, many people know the value of their pension but have little idea how much they can safely withdraw each year, how long their savings may need to last or how their plans might be affected by market falls.

Drawing too much from your pension early in retirement can create unnecessary tax liabilities and increase the risk of running out of money later in life.

Likewise, failing to plan for longer life expectancy or potential care costs could leave you short of income at a time when earning more is no longer an option.

Having a clear retirement income strategy can help you make the most of your pension, withdraw money tax-efficiently and give your savings the best chance of lasting throughout retirement. It can also provide reassurance that your finances are prepared for whatever the future may bring.

Having too much risk in your investment portfolio can be a mistake in your 60s, but you may still need your money to continue growing. Moving everything into cash may feel safe, but over a retirement that could last 20 or even 30 years, inflation can significantly reduce your spending power.

Putting off writing a will

It’s common to put off writing a will or setting up a Lasting Power of Attorney simply because neither is pleasant to think about.

However, having an up-to-date will is vital for your loved ones. Without one, families could face unnecessary delays, additional costs and avoidable stress. In some cases, more of your estate could be lost to tax than necessary.

Writing a will is only one part of effective estate planning. Estate planning is about deciding what should happen to your money, property and possessions after your death, who should make decisions if you are no longer able to, and aiming to ensure as much of your wealth as possible passes to the people and causes you care about.

Taking the time to put the most suitable plans in place can provide peace of mind for both you and your family.

Trying to manage everything alone

Even in your 60s, it’s not too late to put a clear financial plan in place. Whether you’re preparing to retire, already drawing an income, helping children or grandchildren financially, or thinking about passing on your wealth, the decisions you make today can have a lasting impact.

At Continuum, we can help review your pension, help build a sustainable retirement income strategy and help to ensure your estate is structured as efficiently as possible for you and your family.

Whatever your age, one of the biggest financial mistakes you can make is trying to navigate life’s biggest financial decisions alone. Having a trusted financial adviser by your side can help you make informed decisions with confidence and give you greater peace of mind for the future. Contact us today.

This article is intended for general guidance only and is based on the opinion of Continuum it does not constitute financial advice. Individual circumstances vary, and you should consider seeking advice from a regulated financial adviser before making any decisions about your Mortgage, Savings, Investments, or retirement planning.

The value of an investment can go down as well as up. When investing Capital is at risk.

A pension is a long-term investment; the fund value can go down as well as up and this can impact the level of pension benefits available. Pension Income could also be affected by interest rates at the time benefits are taken. Pension savings are at risk of being eroded by inflation.

The Financial Conduct Authority does not regulate taxation and trust advice or will writing.