PWM Financial Management in Port Elizabeth believe a good advisor will first find out in which life stage you are, and where you want to be, before formulating a flexible plan to get you there.
Financial planning is an ongoing process that adapts to each of the four life stages that you will encounter and is not a one-size-fits-all solution.
PWM found a good overview of the four financial life stages by the Financial Planning Association of Australia, which is equally applicable to us here in Port Elizabeth:
- Young to mid-life (20-40): This is the establishment phase. You are just starting out – building your career, maybe getting married and thinking about having children. Your financial planning requirements will generally revolve around buying your first home, family healthcare, income protection, debt management and business planning.
- Mid-life (41-50): By now you are in the consolidation phase. You have most likely accumulated some assets and are focused on creating a comfortable standard of living and maintaining it in the long-term. Your financial needs will include healthcare, investments and tax management as well as planning for your retirement and setting up a will.
- Pre-retirement (51-64): As you near the end of your career, you may be concerned about how comfortably you can retire. Retiring at 65 means you could be on pension for up to 20 years – so preparation is key. Your primary financial concerns will probably be eliminating any debts, protecting your assets and making sure that you have good medical aid. If you are in business, you should have an exit strategy in place. You may also be helping your children financially or ensuring that they are taken care of in your will or trust.
- Retirement (65+): Now is the time to kick back and enjoy the fruits of your labour and sound financial planning. Healthcare and care plans for your old age should be in place. You will need to preserve your capital so that you can live off your investments now that you are no longer earning a salary. Your thoughts should also turn to estate planning and minimising the tax implications for your beneficiaries.
Good financial planning is essential at every life stage. It’s never too early or too late to talk to one of our advisors at PWM Financial Management in Port Elizabeth.
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