Friday 21 December 2018

Finance Fridays - Financial checklist for the over 50s

We were talking about safe places to save large amounts of cash for last week’s Finance Fridays. For this week's we are looking at the things you need to get in order once you hit the big 5-0. By the time you reach 50 you will have many years of work behind you. You may have plans to retire soon but are your finances in order? Let's have a look at some of the things the over 50s need to look at.

Mortgage – If you have a repayment mortgage and paid all of the monthly instalments then you should be on track to owning your home outright. Keep checking your annual mortgage statements and make sure you are on the most competitive interest rate. Once your mortgage deal comes to an end it's very easy to slip onto the expensive variable rate.

There are still many mortgages that have been taken out on an interest-only basis. This means you only pay off the interest due on the amount borrowed. You should have another policy in place to pay off the capital. Check this is still in place and the forecast is saying it will reach the requirement amount needed to pay off the sum borrowed at the end of the term.

Pensions – In recent years pension rules have changed a lot. Unless you are in ill health or a profession that has an official early retirement age (such as footballers) the earliest you can take your pension now is 55. This may have seemed mean to increase the pension age from 50 to 55 but one of the reasons behind it was that people were retiring early but then finding they didn't have enough to continue living on once they got older. Take this message as a warning and get forecasts on how much income you expect to receive when you are planning to retire.

Death planning – A person's death is obviously traumatic but there are several things you need to sort out. If you are unsure of what is involved then Sun Life has answers to many of the common questions.

It's a grim thought but you wouldn't want to die knowing you had left your finances in a mess for your loved ones to sort out. Without a will your wishes may not be known and your property, money and possessions could end up going to the wrong person. It might even end up being the cause of a long and costly legal fight.

If you are thinking about making a will then be aware of the current inheritance tax rules. Rises in property prices have meant many people's estates now become eligible for inheritance tax. The rules are quite complex so get some professional advice about what is exempt and how you can lower or protect against any potential inheritance tax bills.

Another thing to think about around death is of course your funeral. Make it clear if you prefer to be buried or cremated. Burial plots are expensive and in some parts are in short supply so it could be worth securing a plot in advance.

Are you over 50? Have you thought about your financial future?

Finance Fridays will be taking its annual Christmas break next week but it will return on Friday 4th January 2019.

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