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Planning for Your Retirement and Children's Future

Way back in your 20s or 30s, the thought of being in your 50s or older was impossible to conceptualise, but now it's here and you have all sorts of new issues to deal with. One of these is planning for a time when you're no longer around, but how can you do that if you don't know when it is? You want to be sure that your children are taken care of when the day comes, and you can do that with sound financial planning and assessment.


A Difficult Market


This may not seem like the best time to make financial plans. The economic crisis looms over us all. There's a strong chance that the recession will stay for a few years; that's much more likely than the return of a good investment climate. Tax always goes up whichever way they play with the figures. A visit to your local supermarket costs more every time you visit even if you make a list and use all the available coupons.


Where you keep your investments is vitally important. Cheque accounts prefer to pay no interest at all; if they do it's certainly under the rate of inflation so you're losing money by leaving it there. That's why it is important that you keep some money in High Interest Current Accounts that best serve your needs.


What's Your Property Worth?


The equity in your home has probably reduced considerably these last few years. Some properties are moving up in value again, but it will take some time before they get back to the glory days. When your property is part of your estate, then it may have a reduced value when going through probate because the selling price is not a market driven.


Don't let that change any of your planning as your children will be given the choice of when to sell your property, if you still hold it at the end of your lifetime. That way your children can keep the property and rent it out if markets are poor and sell it when the times are better.


Will Writing


You'll need to make sure your will is not only written, but updated regularly. Check it over at least once a year. You'll need to check more often if people in it die before you or if your children get married. You might even change your own marital status.


It's time to brush up on understanding the will writing laws, to find out what you can give away tax free and how long you have to live (seven years) to give away an item that falls outside the rules of Potentially Exempt Transfers (PET).


There's a long list of allowances that the taxman doesn't mind you giving away every year. You can give away £3,000 every year as gifts and these will avoid inheritance tax, which might well be the tax that ruins your financial planning in the long term.


If there's a wedding in your family, parents can give gifts of £5,000, grandparents can give £2,500 and anyone else can offer £1,000. You'll also like to know that you can give away as many £250 amounts as you like.


You can also make regular payments out of your taxed income, but you can't give all your income away as you need to prove that you have sufficient to live on.


Long Term Planning


What about the longer term? In reality, you may not know how much money you'll have and when you'll enjoy it. You might lose all your money or you might win the major lottery prize in the last six months of your life. You can only plan for what you think you'll have.


Think about expenses. If you're over 50, it's likely that your children will be leaving home if they haven't gone already. You might still have some university finances to meet from your budget. You might need to plan for a wedding or two for yourself or your children. Another popular choice for the over 50s is moving abroad. Properties have become much cheaper the last few years and good opportunities are to be found. At the other end of the scale you also should consider pre-paid funeral plans as a way of saving your estate from potentially higher fees.


We never like to think about what will happen later, but careful planning now will help you balance having a great lifestyle now with having enough to leave to your children.

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