Liberty Financial Planner Phillip Kassel reflects on what it feels like to turn 50 and finds that the same issues and questions are often raised by clients reaching this milestone
I often joked to myself that I really need to start planning to “SKI” (“Spending Kids’ Inheritance), but the reality is that, like many people at the age of 50, I was still supporting two children studying at university, so all financial decisions are about “we” rather than “me”, which means my big family jalopy needs to keep going for a while longer before I can trade it in for a sporty cabriolet.
At 50, my children had left home following their own pursuits, leaving us with “empty nest” syndrome, yet I still had to budget for their education, medical aid and pocket money. If I ever thought that I could catch up retirement funding in my 50s due to more disposable income, I’d have been very wrong! There just isn’t that extra cash. That’s something I’d have told my younger self and something I repeat frequently to my clients.
The aim was always to pay off the mortgage bond as soon as possible, and that’s close to being realised, but the reality is that there have been many occasions when I’ve had to draw on my access bond – primarily for education and, of course, when I found myself out of work back in the late 90s. Life happens and having access to low-interest funds when you really need them is invaluable, even if it’s not part of the plan.
I’m sort of debt-free, had a few memorable holidays (both with and without the kids), but I’ve come to realise that only two things really mattered: the time I was able to spend with my family, and the fact that I didn’t allow myself to become a couch potato.
My relatively healthy lifestyle, a combination of proper eating, stress-management, and regular exercise, has allowed me to reach this birthday milestone relatively lean and mean. This causes an additional problem – my finances need to match my longevity, which may see me living until at least 100.
Preparing for a second life
When I turned 50, I found my priorities had changed. During my younger years, it was all about making ends meet, paying the rent and other controllables – like putting food on the table, not killing the boss, and ensuring that both medical and education expenses were met.
Now, I can see myself paying the university fees, eating out every now and then and downsizing our home. I can even afford all the transfer fees and agent’s commission!
My goals are to now start diversifying into other areas of interest in my life. The prospect of living longer scares me and I need to upskill in order to enter a new phase.
I can no longer consider myself “middle-aged” as I see too many decades ahead of me, and there’s no way I can compromise to the extent that I can sit back and rely on my current retirement funding to see me loaf around for another five decades.
With the kids growing up and moving on, I’ve found that I have more time than before to really get down to doing the things I always wanted to do, like learning a new skill or language, finding time to read, spending time with my pets and exploring our country.
Being part of the Sandwich Generation
I keep reading about this so-called “Sandwich Generation”. My parents are still pretty healthy (in their 70s), but I do send them money every now and then and, even though the kids will be off our medical aid and pursuing their own careers soon, they’re still going to need some financial help.
For young people, starting out seems so much more expensive than it was in my day and jobs are hard to come by. So that will be a bit of a challenge: ensuring that they’re off to a good start while making sure that my parents don’t end up penniless.
Adapting my financial plan
From a financial planning perspective, one thing that can be trimmed down in order to concentrate on other aspects of my financial plan, is that I can afford to reduce my life cover as my retirement capital builds up.
Far more important to me now are three things: health-care cover, retirement capital, and disability/dread disease cover. Health-wise, my medical aid is good and I should be increasing my retirement investments, but the prospect of contracting a terminal illness or not being able to look after myself, really does scare me, so I can’t afford to reduce or stop my premiums for that. A necessary evil, they say, but I certainly don’t want to be a burden on my kids.
I suppose the bottom line for me is this: when I turned 50, rather than feeling older, I felt that I was just entering the second part of my life. I felt like a new-born all over again with both a measure of excitement and fear.
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