5 top tips for financial planning in your 60s

When you hit your 60s, you have a lot to think about when it comes to your finances, from pensions and reviewing life and wealth protection, to considering any potential long term care needs.

1. Understand your financial position

Undoubtedly the main thing to start thinking about as you approach retirement is what your income and expenditure will be. For clarity that’s not what you hope they will be, but what they realistically will need to be. After all, there is no point in building a realistic plan around an unrealistic target or worse still a target that you aren’t actually happy with – so be truly honest with yourself!

At this age you will normally find that some costs will actually go up. Medical costs perhaps as you get older but also holidays and day to day spending as you are not tied up in work each day. Fuel or domestic travel costs on the other hand will likely reduce as you stop the daily commute to work.

We always use cashflow modelling with clients and make use of personal allowances, as failing to take tax into account (or indeed not using available allowances) can have a surprisingly detrimental effect on the efficiency and sustainability of your income.

2. Think about gifting 

If you have a large estate, it is at this point that you might also want to start developing a plan to reduce your estate for inheritance tax purposes. Gifting money is one of the easiest ways to reduce inheritance tax, but you don’t want to give away money you will later need.

Again, being realistic about future care costs is therefore important at this stage.

With all of this in mind, now is the time to do a holistic review of your pensions and investment portfolios to ensure that they not only meet your agreed attitude to risk and capacity for loss but are also able to provide the returns required to fund the lifestyle you have set your hopes on.

3. Review your investments

Cash in the bank is only ever going to go down in real terms (in today’s interest rate market) as inflation relentlessly takes bites out of its purchasing power.

Reviewing your investments at least annually is also therefore vital to ensuring that your plans remain on track and this enables you to make any necessary changes along the way.

4. Keep your Will up to date

If you haven’t already done so, now is the time to look at revising your Wills and also arranging Powers of Attorney. Most of us will hopefully still feel like spring chickens when we retire but both of these documents will all but certainly be required one day, so getting these things in order now means you don’t have to be reminded to do them every year (by your financial adviser) or worse still, you need them before you have them.

5. Introduce your family to your financial adviser

Updating your Will also provides a great opportunity to introduce your adviser to your family as if/when something does happen, your adviser is likely to be one of the most knowledgeable person in terms of your financial affairs and be in the best position to help your family when you are no longer around.

While retirement these days looks different for each of us, taking time to go over your plan will enable you to make any necessary adjustments so that you can retire with peace of mind about your finances.

Chartered Financial Planner Richard Hollington

Our latest report, Changing Landscapes: Retirement is not just for the old, examines the importance of starting your financial journey early and key financial considerations for different life stages.

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The value of investments may fluctuate in price or value and you may get back less than the amount originally invested. Past performance is not a guide to the future. The views expressed in this publication represent those of the author and do not constitute financial advice.