As they are sincerely involved in achieving this, they do overlook the future financial wellbeing of their children who are focused on paying off a mortgage or enjoying their lifestyle.
Ellerfield now offers a solution to this issue towards older clients, emphasising the need to protect their financial position by addressing the planning needs of their children. By providing whole family financial planning advice, Ellerfield can help to protect their older clients and educate their children against the unforseen events such as:
- Death of the adult child who has dependents (grandchildren) and debt
- Bankruptcy
- Illness, injury or disability, can stop income for weeks, months, or even years
- Separation or divorce from their partner.
In situations such as these, parents will have to step in to provide support and this will erode their retirement savings. Older family members would help out, although it’s not always financially possible for them to do so.
This service will improve retirement outcomes for older clients, improve financial outcomes for the younger generation and help preserve wealth for transfer to the next generation at the appropriate time.
In 2004, the Australian Bureau of Statistics (ABS) stated that life expectancy had risen by over 40%, meaning that many people can expect to live into their 80s and beyond. Consequently, the parents of adult children will survive for a large portion of their children’s lives and will be called upon for assistance if their adult child suffers from unfortunate events.
For example …
A man died at the age of 32 from cancer, leaving behind two infant children, wife and a mortgage. Both his father and father-in-law came wanted to get some advice on how they would be able to allow the widow to keep their house. Both were in their late 50s, coming up to retirement; they had to take on a $350,000 mortgage repayment to support the daughter’.
Insurance
Insurance is a must-have protection mechanism which won’t prevent an unpredicted event from occurring, but provides capital at a fraction of the cost, in comparison to a client having to pay for everything themselves.
Certain adult children may not want to take out insurance or can’t afford it. In such situations, the parents could pay for the cover, or at least part of it, until the children are in a better position.
Would you risk your capital to get another ¼% return on your money?” That ¼% return on your investment could equal the cost of the insurance premiums which will protect your capital from any erosion and provide financial stability to the adult children.
People often don’t tend to anticipate problems until something actually goes wrong, and by that stage, it may be too late.
Contact an Ellerfield Financial Planning adviser today to discuss your options.
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