Many Australians are under the misconception that they only need a financial planner if they come into a financial windfall. A financial planner is helpful for people of all stages of life. Whether you are just starting out in your career, raising kids, or retirement is looming, seeing a financial planner can help you make more informed financial decisions and maximise your opportunities.
Financial Planning for Young Professionals
Young people, who are just starting out in their careers, are often saddled with education loans, but also have high disposable incomes because they are not yet encumbered with mortgages and family responsibilities. Young professionals need sound financial planning to start out on the right foot. There are financial decisions that, made strategically now, can help when starting a family or climbing the career ladder. A financial planner can help a young professional with:
- Developing cash flow management strategies – This is helpful in managing disposable income, ensuring that a good portion of it is going to savings and investments.
- Crafting debt reduction strategies – Education loans can weigh down your credit rating, however it is possible to cut these debts quickly with a sound reduction strategy.
- Formulating wealth creation strategies – This is the perfect stage in life to develop long-term investments which, done well, can alleviate financial pressures in later years.
Financial Planning in The 30’s And 40’s
The 30’s and 40’s is a time of great change for most people. It can be a time for weddings, divorces, and or children. All these life events can have a significant impact on your finances. A financial planner can be useful during these life changing events with:
- Wealth creation strategies – A financial planner can design a strategy with the goal of building wealth quickly. This is particularly important for those who did not focus on saving in their younger years.
- Crafting sound investment plans – This includes short-term investments to make money quickly and add into a larger investment pool.
- Formulating financial protection strategies – These strategies can help protect the family’s lifestyle in the event of injury or death.
Financial Planning In Preparing For Retirement
The transition to retirement phase is crucial for preserving your lifestyle in retirement. A financial planner can help you design a strategy that suits your needs. Depending on your circumstances you may opt for a Self-Managed Super Fund (SMSF) which a financial planner can help you set up. A financial planner can help with SMSFs with:
- Structuring the fund’s investments properly – A financial planner will give useful input on investment research and will help identify opportunities. He/she can help structure the investments for both short-term quick returns and long-term investments.
- Tax compliance – Advise on ways to stay tax compliant while keeping taxes at a minimum.
A financial planner is also helpful in answering questions that concern retirement. These include:
- How much money is needed for a comfortable retirement? The planner can help estimate the amount needed to maintain a certain lifestyle in retirement.
- Is there enough to see me through? If there is not enough, a financial planner helps explore options to make it last longer or generate more wealth. Through this process cash flow management strategies are designed.
- What choices should I make for retirement? A financial planner helps structure your investments, modifying where necessary, to help ensure you have the most comfortable retirement possible.
Financial Planning In Retirement
In this phase of life, a person is largely unencumbered by financial responsibilities, intent on living out their remaining years in comfort. The biggest concern becomes aged care, especially for retirees living alone. If one is to be placed in an aged care institution accommodation bonds and ongoing funding for the care become concerns. A financial planner becomes useful in:
- Exploring and outlining options available – A financial planner can calculate which funds are available and help you determine your options.
- Exploring funding options for the accommodation bonds – A financial planner can look into ways of utilising your income streams, investments and/ or home to fund bonds and/or care.
- Getting more benefits from the government – A financial planner can provide advise on how to get maximum government entitlements.
Using the services of a financial planner at every stage in life is highly advisable for anyone looking for long-term financial stability. A financial planner is beneficial whenever there are financial decisions to be made to help create and manage wealth.
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The information within, including tax, does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. The views expressed in this publication are solely those of the author; they are not reflective or indicative of licensee’s position, and are not to be attributed to the licensee. They cannot be reproduced in any form without the express written consent of the author. Elliot Watson Financial Planning Pty Ltd and its advisers are Authorised Representatives of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.