Making Cents: The key financial areas to prioritise from your 40s onwards

WHEN there is so much conflicting advice about finances and what to prioritise it can be hard to know where to start. Last week, I looked at the key areas to focus on in your twenties and thirties, and also the common mistakes to avoid. From your forties onward, goals may change and there are other areas that need to be be prioritised, writes Gráinne McGuinness

In your 40s

Do

— Reassess your pension. Ideally you have been paying into one for more than a decade by the time you reach your forties, but chances are you’ve given it little thought. Building it up is the most important thing in your earlier years, but now is the time to take control. Gather all your information and go for a full financial review. Your bank will be happy to arrange one or you can go to an independent adviser such as the Money Doctor John Lowe at www.independentfinancialadvice.ie. Decide what level of income you want in retirement and start funding as much of it as you can afford.

Don’t

— Move home or undertake major renovations without being sure that the change is necessary. With the family home often at its busiest at this time, many couples decide to either move or significantly extend their home. If you genuinely need to, then of course do. But sometimes upgrades are undertaken just because the money is there and the mortgage has been significantly shrunk. Imagine if, instead of paying to change, you turbo-charged your mortgage repayments and cleared it ahead of schedule. The interest savings and extra funds available down the line might be far more valuable than an attic conversion that gets little use as kids leave home.

In your 50s

Do

— Review your health cover. According to insurance expert Dermot Goods of www.totalhealthcover.ie, if you have renewed your health insurance for more than two years without shopping around, you are paying more than you need to. Now is the time to take a good look at your policy and see if the level of cover is enough to meet your needs. With increased medical care likely as you age it makes sense to look for a plan that will include refunds on your routine medical costs with no excess to pay first. Remember, you are free to switch to any provider in the market and your new insurer must accept the time you spent with your previous insurer and cannot apply new waiting periods for existing benefits. Don’t feel bound by loyalty, do your research and get the best deal for your money.

Don’t

— Put yourself in debt for your children’s sake more than you absolutely have to. It is only natural for parents to want to give young adult offspring every support possible. But at this stage you need to prioritise financing for your own future. If you have the income to fund a good pension and still help your children with house deposits, weddings and extended education, then brilliant. Lucky them.

But if you can’t afford it comfortably, don’t do it. You may think that your children will care for you in your old age, and they may feel the same. But when the time comes, if they have conflicting obligations due to their own families, they may not be able to help.

In your 60s and beyond

Do —

As you prepare for retirement, make sure you know exactly what you are entitled to in terms of state pensions. This can be quite a complex area depending on how much you worked during your life, so it is well worth sitting down with an adviser a few years before you retire to work out where you will stand. Continue to mind your money once you retire.

Don’t

— Rule out earning opportunities just because you hit the retirement age. Your expertise and experience doesn’t cease to exist the day you turn 65. For many of us, working provides a sense of purpose, structure to the week and may have a social aspect.

Hopefully you no longer need to earn, but if you find something you enjoy, it will help top up your pension funds as well as the other benefits.

DEAL OF THE WEEK

This week’s deal is one for sports lovers. To mark their sponsorship of the Leinster Schools Rugby Cup Final, Bank Of Ireland are giving away 2016 one-month subscriptions to the Setanta Sports pack.

The offer is open to new Setanta Sports customers only and you have to have an existing satellite subscription. The Setanta pack consists of their six sports channels, including BT Sport 1 and 2.

They have exclusive rights to some Premier League games each week, plus Champions League and Europa League. The also broadcast Champions Cup rugby and GAA.

And if you’re a golf fan, the month will include their coverage of the Masters from April 7-10. If you’re interested simply go to www.setanta.com/BOI and register for the offer by completing the online form. You do not have to commit to a monthly subscription or give payment details, but it is limited to the first 2016 customers who apply.