Life Stages

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Getting started


A 10-year head start is what makes all the difference.

And here’s why

When you save or invest in a given year, your money earns interest. The following year, you earn interest on your original money plus the interest from the year before. In the third year, you earn interest on your original money and interest from the first two years (and so on for however many you live).

So start saving/Investing today

This is what’s known as a compound interest. And it’s one of the reasons you should start saving now, when you have decades ahead of you for that money to grow. To free up some cash for your initial investments, here are a few simple things you can start doing today:

  • Be real: First things first. Be realistic about what you actually need and what you just “sort of want.”
  • Embark on a tall order so you don’t come up short: Take the time to sit down and identify your goals: short, medium and long. Define them in clear absolutes: saving up for furniture, a car, or a honeymoon (short term); saving for a house or apartment (medium term); planning for kids, their education, your retirement (long term).
  • Give yourself some credit: In order to qualify for the best interest rates on a credit card, car loan or mortgage, you’ll need to build a solid credit history. So pick a single card and stay on top of the payments.
  • Cut the cord: If a parent or role model is helping you manage your finances, it’s time to take the reins and put yourself in charge. After all, whoever controls your finances controls your life—and your future.
  • Think before you marry: Remember, your spouse will be your co-money manager, so financial values and views on spending and saving are something you should discuss before you consider a ring.
  • Put your health first: Make sure you have continuous (i.e., no breaks in coverage) health insurance. Don’t let an unexpected health issue and the resulting medical bills diminish your savings.

Building


This is the time to seriously consider your financial future. More likely than not, you’ll have to consider the financial needs of your spouse and/or children, which means your financial responsibilities and expenses are likely to increase. Don’t be thrown off track by short-term moves in the market and don’t get distracted by the headlines. Stay on course. Remember that a disciplined long-term investment approach is always best. In addition to the general advice above, here are some methods for addressing the challenges and coming out ahead:

  • Get rid of it: Eliminate non-deductible debt. Nothing frees up cash for your growing family responsibilities like paying off high-interest loans. If you didn’t take care of credit card debt in your 20s, now is the time to do it. Student loans and car loans come next.
  • Be a number cruncher: It’s time to sit down and do the math. Figure out how much you need to retire and start saving for the investment plans you’ll want.
  • Put yourself first: Don’t save for your kids’ education before saving for retirement. It’s easy to take a loan out for education costs.
  • Spread the wealth: Diversify your investments to protect your portfolio. You’ll need to weather both the ups and the downs securely.
  • Ask the hard questions: Plan for the “what if’s” by insuring what you have. Homeowners insurance, health insurance, disability insurance and life insurance: they’re all crucial

Your 40’s


It’s now time to prepare for the second half of your career and for retirement afterwards. If you’re fortunate have a disposable income, be sure to invest a portion of it securely in order to maximize the potential retirement benefit. Remember, you’re far more likely to need that discretionary income in your later years.

To help you secure both your own and your family’s financial futures, here are six targeted initiatives to consider

  • Create a master plan: Figure out when you want to retire, how much you want to earn each year and create a realistic map to reach your goals.
  • Save: Once you know how much you’ll need, stay disciplined and save consistently.
  • Don’t skimp: You may have more expenses than ever; still, it’s important to keep in mind that every dollar you save now can earn you plenty of retirement income.
  • Keep monitoring: Scrutinize your retirement plan every year. Make sure your investments are living up to your expectations.
  • Embrace change: Be open and flexible to changing your retirement age and rate of savings as the economy and your portfolio’s performance shift in response to events.
  • Protect your loved ones: Make sure the beneficiaries on all your accounts are up to date. If you don’t already have one, create a will. And determine if your life, disability and home insurance provide enough coverage for your family’s needs.

Planning for retirement


If you haven’t started your retirement planning yet, then now’s the time put one in action. Many of your larger expenses like your mortgage either are or soon will be behind you, so it’s essential to redirect those funds toward diversified asset. Keep in mind that you’re entering a phase where market volatility is far less beneficial than guaranteed income.

And remember, since you’re in your peak earning years, you should maximize your super by making sure you are contributing up to the maximum allowed.

You’ll also want to put each of the following on a checklist

  • Look out for Number One: No more distractions. Your retirement plan has to be your first priority now.
  • Be Calculated: Estimate living expenses and determine what your accounts will be worth when you retire. Contact us at ASCOT Wealth Management to give assist you in deriving a more accurate number.
  • Consolidate: If you have worked for several employers over the years and have accumulated a number of super plans and if you have not already done so, consolidating them. It can make managing your portfolio simpler and easier.
  • Make it an obsession: It’s important to pay close and frequent attention to your financial plans. Be sure to review them yearly. At this stage, your plans need constant attention if you are to meet your objectives.
  • Make re-assessments: Re-assess the risks and rewards of your various investments. Make sure you are looking at you’re asset allocation in order assess whether or not it needs re-balancing.

Retirement can signify a lot of things to a lot of people and you'll need to create a nest egg that will make your retirement years as comfortable, if not more, as when you were working.

It's never too early to think about saving for your golden years. As the average life expectancies increase you should look to put away more in order to accommodate for a potentially longer retirement.

Enjoying retirement


Now more than ever, the tax concessions for retirees post age 60 are very attractive and even more so if you are 65 and over.

Tax free income and tax free lump sum withdrawals, are two of the major attractions available to those that have investments in super. However all is not lost, if you have investments in a non-concessional environment, you should speak with one of the advisers at ASCOT Wealth Management to see what strategies are available to you.

And lastly, the choices you make today can have an enormous impact on both your current finances and future retirement.

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