The Importance of Financial Planning

Life Assurance – Looking After Your Loved Ones

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Statistics show that people are more likely to insure their cars and homes than themselves. They don’t seem to baulk at all about insuring their borrowings such as the mortgage on their home, however, insuring themselves has been shown to be much more price sensitive. Perhaps it is the mandatory nature of car, home and mortgage protection cover that makes it so much more acceptable. In reality, however, your life is your most important asset – especially if you have dependants.If you have people dependant on your income generating ability such as a spouse and children you really ought to be taking measures to ensure that their financial wellbeing is secured in the event of your untimely death.

Stop, Think and Ask Yourself…

  • Do I have dependants who rely on me and my income and who would be at a major financial disadvantage if the worst were to happen to me?
    • If the answer is yes and there is none or not enough Life Assurance cover in place then you should consider doing something about it.
  • Questions that need to be asked and advice that needs to be sought around this are: –
    • How much cover should I have?
    • Apart from providing for my dependants future financial wellbeing, do I have liabilities that need to be covered?
    • What type of cover do I need and for what period of time?
    • What is the cost and how do I go about getting best value?
    • Do I need to cover my spouse’s life also?

So…what are the next steps?

There are many reasons why people are slow and reluctant to put in place appropriate and sufficient Life Assurance cover.

  • It’s discretionary and therefore not prioritised – it should be though
  • There is a fear that it is hugely expensive – in general this is not the case
  • Maybe you feel that having Mortgage Protection to pay off your mortgage is enough – it’s not
  • How do I start?? – it’s easy, seek good advice

The role of a good advisor in all of this is to help you through the process of:

  • Identifying what type of cover you need
  • How much cover you need and the cost
  • Helping you choose the most appropriate policy for your needs
  • Assisting you through the process of putting the policy in force
  • Carrying out regular reviews to take account of your changing circumstances

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The Importance of Financial Planning

Everyone Needs a Financial Plan

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How often have we heard the expression “I would not have achieved my goal without having a carefully thought out plan and sticking to it”. We hear it from high achieving people in the world of sport and business alike.

You will hear it from top class golfers like Rory McIlroy who will set his objectives, arrange his playing, coaching and work schedule for the year ahead and then go and execute that Plan. If he starts his year with no plan then he would say the focus simply isn’t there to be successful. This same principle is equally important in all other situations – the football/hurling team coach, the business manager or home-maker all need a plan. Doesn’t it make eminent sense, therefore, to seek assistance in achieving the objectives of your financial plan through each stage you face in your life?

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The Importance of Financial Planning

Pensions – No longer a luxury but an absolute necessity

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The recent budget announced that the Pensions levy is being substantially reduced and indeed will be abolished completely by the end of 2015. What was seen as a major obstacle to the encouragement to save through a Pension Plan for your retirement has now effectively been removed. Here therefore are some key considerations for you to bear in mind.

1. Start as soon as you can

  • Make no mistake, the starting point is the most important point when it comes to pensions.
  • Of course it is hard for someone in their 20s to think about saving for their retirement – let’s face it they are immortal and will never get old! – and it is made even harder in a fraught economic climate.
  • But the sooner a pension is started, the less a person will have to save. Someone who is 25 and takes out a pension is saving themselves a world of financial pain in the years ahead. If they wait until they are 40 they will need to put aside over 4 times to get themselves the same return.

2. Never panic though

  • More than 50 per cent of the population does not have a private pension.
  • While it is better to start a pension early, that doesn’t mean it is ever too late to start, it simply means that the later the start the more you may need to put in.
  • Counterbalancing the late start is probably a greater degree of affordability as you get older.

3. Managing risk

  • When you are younger you can afford to take a degree of investment risk that can include investment in high risk stocks.
  • As you get older the fewer risks you should take.
  • A gradual de-risking should be a feature of your strategy with each passing decade.
  • Good advice will help steer you through the process and to identify suitable opportunities without putting all your eggs in one basket.

4. Mix things up

  • Don’t just decide on a sum you’re comfortable putting into it and leave it at that. Change the payment amount as your life circumstances change.
  • If you get a pay rise you can increase it, if you have children you can reduce it (but only slightly). If you are due a bonus you can put in a once off lump sum.

5. A necessity, not a luxury

  • Putting pension money aside for your future retirement should be considered an unavoidable outgoing and not a luxury.
  • It is right up there with a mortgage, food, clothes and electricity as one of the things people need to realise that they cannot do without.

6. Keep tabs and get good advice

  • You should check your pension plan regularly.
  • Having access to a good financial planning adviser who will steer you through the process and carry out regular reviews with you is vitally important.

Source: Lifetime Financial Planning 2014