Tag: planning

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4 ways an early inheritance could change your child’s life

Giving your children an early inheritance, rather than waiting until you pass away, can help them during key stages of their lives.

Here are four examples of how you can enhance their financial security during your lifetime:

  1. Home deposit: Paying some or all of your child’s deposit can help them break into the property market, avoid expensive mortgage insurance and build equity for their future.
  2. Mortgage repayment: Contributing to their mortgage, either via an offset account or extra repayments, can reduce the interest paid and shorten the loan term, saving them money over time.
  3. Reducing education debt: Reducing your child’s student loan debt can free up their cashflow and help them cope with the rising cost of living and any unexpected expenses.
  4. Kickstart investments: Giving a small sum can motivate your child to develop a savings plan, helping them to combat inflation and build long-term wealth.
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Understanding Sequencing Risk: Protecting Your Retirement Savings

Market performance is unpredictable, and as you approach retirement, these fluctuations can have significant consequences. Careful planning and sound financial advice are essential during this critical period.

What Is Sequencing Risk?

The “retirement risk zone” refers to the 5-10 years around retirement when savings are most vulnerable to market downturns. Unlike younger investors, retirees may face compounding losses from early negative returns while drawing down their savings, known as sequence of returns risk.

How Sequencing Risk Impacts Retirement

For example, if you retire with $1 million and withdraw $40,000 annually, an initial 15% market drop followed by gains of 5%, 10%, and 20% over the next three years can still deplete your savings faster. Conversely, retiring in a bull market can offset withdrawals, preserving your balance.

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Planning for a Comfortable Retirement: A Simple Guide

Retirement marks a significant milestone in life—an eagerly anticipated period where we can finally unwind, pursue our passions, and cherish moments with loved ones. However, the journey to a comfortable retirement requires careful planning and consideration. Here are some steps you can take to ensure financial security in your golden years.

At the heart of any retirement plan lies a crucial question: How much do you need?

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