For most of us, our earning potential peaks in our 40s but the decade from 50 – 60 is still a great opportunity to finalise provision for retirement and make last minute adjustments. When it comes to smart buys and investments there are some great options at this stage.
A laptop. It might be at this stage in life that you realise you don’t want to retire at 65. If that’s the case then look at ways you can leverage skills, experience and profile that you’ve already generated to create a job – and an income – for retirement. That could be moving into part time consultancy, setting up a digital business or writing a book.
A future proofed property. You might be fighting fit and healthy now but it’s worth considering whether a steep hill and three flights of stairs will be such a good way to keep fit in 10 years time – or make daily life very difficult. Part of smart retirement planning is ensuring you don’t end up in a position where you have to move if you really don’t want to. Look at ways that you can future proof your existing home – for example, installing a home lift – or consider a property like a bungalow. If you have the time and resources this is a great decade in which to build your ideal retirement nest, with room for the grandkids and smart construction in your ideal location.
A SIPP (Self Invested Personal Pension). If you have the time and the inclination to take more control over the investments you’re making via a pension then a SIPP can provide it. This is a UK government approved pension that offers up to 45% tax relief on contributions and doesn’t attract either income tax or capital gains tax. With a traditional pension the investments are run by the pension fund’s managers and made across a fairly short list of funds. With a SIPP you can control this yourself from a much wider range of options.
The next generation. If you have cash to spare at this stage there’s a whole generation of budding creatives and entrepreneurs looking for support via unsecured and secured loans. The new Innovative Financial ISA (IFISA) is designed to allow those with cash to invest it into new businesses via peer-to-peer lending. The interest is tax free and promised returns are 12%, some even 20%. If you’re seeking higher returns on what you’ve saved, but you don’t want to take the risk of investing it on the stock market, the IFISA is a less risky choice.
Illness. Most of us start to experience some physical aches and pains by our 50s but for some this can turn out to be serious. At this stage illness that affects your ability to earn and/or keep up with payments could cause problems for retirement plans that you’ve made. Insurance can provide cover should you find yourself unable to work because of being ill.
Parents. As our own thoughts start to turn to retirement, most of our parents are already there and may have been for some time. The 50s may be a decade in which caring for an elderly parent has to be factored in, both in terms of time and cost. Medical costs, legal documents – such as Powers of Attorney – and care home fees may all need to be taken into account.