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Are your retirement plans safe?

If you are approaching retirement [1], you should consider protecting your retirement plans and finances by ensuring your children have sufficient cover for their own families, such as life insurance, trauma, and income protection.

In the event something was to happen to your son or daughter which left their family without any means of support, it would most likely be you who the family turns to for support.

We encountered a situation recently with a retired couple whose financial situation was well secured with a self-funded pension arrangement. Unfortunately, their daughter suffered a serious and sudden long term health issue and they are now looking after the two grandchildren, both physically and, to a worrying extent, financially.

Thankfully their daughter had some insurance that assisted with the family’s cashflow needs; however the son-in-law had to stop work to care for her and the insurance funds were not sufficient to replace his necessary income and pay their liabilities.

The question arises – would you want to be the only source of support if something happened to your grown children? Circumstances such as this could place serious financial pressure on your retirement funds and in turn your overall retirement plans.

Whether you are already retired or about to retire, talk to your son or daughter about their financial obligations, and make sure they have a plan in place to protect their family’s financial future. And if they are not in a position to do so themselves, it could be something you pay for on their behalf.

We strongly recommend you conduct an ‘audit’ on how vulnerable you are to an unexpected event happening to your children. Our financial planners [2] are available for a free audit of your children’s personal insurance needs. If you have any questions, feel free to leave a comment on this blog post or call us on 8132 9288.

^Michael – Practice Development Manager