Financial Planning At Different Stages Of Life

Life is full of changes, and with each new set of circumstances come new financial needs. These transitions spark a need to look closely at your finances. A recent study reveals that investors’ households that regularly get professional advice before making major financial decisions fare significantly better than those that do not seek advice. Over 10 years, the bottom line for families with investable assets of at least N1,000,000 who always receive advice is N1,060,000 greater on average in inflation-adjusted Naira. That compares to N290,000 for families who navigate their own finances without help. Financial planning can be especially helpful at the different stages of life. You are young and you are broke, thanks to the harsh economic situation in our great country Nigeria. So when a financial planner preaches the topic of retirement, you may wonder if the planner lives on a different planet or the planner needs psychiatric attention. But now is the best time to start saving for that big event. Time is your biggest friend. The earlier you start, the better off you will be. At this stage, I will advise you to participate in your Government’s contributory pension scheme if you are a worker or have a dedicated bank account for that purpose where you will be saving part of your money on regularly without withdrawing from it except for investment opportunities. Married couples have a reputation for fighting mainly about one of two things. For newly weds, it’s likely to be money. With good financial planning, you are able to budget, set financial goals and determine who will pay for what. He or she can also help you study employee benefits and make sure you are not duplicating your efforts. Whatever your goals are, talking through them with a more knowledgeable person and getting a plan down on paper will help you and your partner work together to reach them. Tensions always rise because of money. Your beautiful children will surely be brilliant and want to pursue a higher education. The costs of college continue to rise, however, and it’s quite difficult for anybody to save the total amount needed for college these days. But the earlier you start saving for college, the better off you’ll be. There is need for you to set up college savings accounts and ensure funds in that account are used for college expenses only. The key is to get started saving because college costs are far and away exceeding inflation. Nobody plans to get divorced, but if you do, your financial situation can change dramatically. It is traumatic enough to go through a divorce. But afterward, most people need help putting themselves back together, mentally and financially. If you wait until years after your divorce to look at your investments, estate planning and asset protection, sometimes it is too late.” Post-divorce planning may involve re-establishing credit, especially if most of the marital assets were in your spouse’s name. You would have to do some rethinking on your budget and retirement plans, and change the beneficiary of your accounts so that your savings won’t revert to your ex-spouse. There’s really a lot of busywork that needs to be done, it is better to avoid divorce disaster at all cost. Whether or not you’ve started saving early for retirement, it’s crucial at this juncture to determine your retirement readiness. Statistically, the most critical time to meet with an adviser in this regard is in your late 40s and early 50s, when the average Nigerian is in his or her peak earning years and accumulating the most retirement assets. Those assets must be properly managed in order to meet retirement goals, which are typically 12 to 15 years out. A mistake at this stage of one’s life will make retirement very unpleasant. Do not forget the menace of global financial crisis. You must strive to eliminate risk in your portfolio and consider investment vehicles such as immediate annuities which offer a guaranteed income for the rest of your life. Some insurance products enable you to participate in the market’s upward moves, but avoid its declines. To determine the best strategy you should adopt, is not dependent on your age but on what you want to accomplish.