Retirement planning for your family

3 December 2016
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Category Family
3 December 2016, Comments 0

In an earlier article about retirement planning a single person. In this article the retirement planning is in the context of a family. Much of the principles will be similar but there is one key difference and that is the fact that you now have dependents to provide for. More mouths to feed and this is not going to be cheap.

Hopefully you will already have started your retirement planning and all you need to do is reassess your plans and make the appropriate amendments. If however you haven’t started then what are you waiting for? Its never too late but the longer you wait the harder it will be to achieve your goals because you want to have time on your side and not work against you.

Definition of your retirement goals

Some people are lucky enough to have a company pension which is generous and if they work their entire life in that company they will have a nice retirement fund upon which they can draw to enjoy their retirement. Nowadays with the global economy being quite volatile and cyclical it is not so common to hear of people working for one company their entire lives. More likely they move around from place to place and don’t build up much of a retirement fund at each.

It is more common that an individual needs to be more proactive in achieving their retirement objectives and this will involve sitting down with their financial advisor to do some real planning. There will be some hard questions to answer like how much do you want to have in the fund before your retire? At what age do you want to retire?

How much income do you think you will need when you retire

How old will your children be when you retire and do you think you still need to provide for them at that age or is it possible that they are working and do not need to depend on you.

What sort of lifestyle would you wish to lead when you retire. Is it to maintain the current lifestyle or do you think you can live with less. Do you currently have your own home and will that be fully paid off by the time you retire? If it is fully paid off and you will be debt free by the time you retire then that’s great you will not need to worry about the mortgage.

Better still if you think you can downsize your house especially when the children fly that proverbial nest and build their own lives. Downsizing can also be used to free up some cash that you can live on.

Analysis of your current situation

If you have already been putting away some funds into a long term savings plan or other type of pension plan then you have made a good start. With the change in your circumstances and having a family to think of, the family budget will have changed from the days of single status. Review the outgoings and see what percentage of it is fixed and what is controllable by you. Put aside more for savings and investment if you need to do so in order to plug any shortfall you have identified with the help of your financial advisor.

Once you have completed the assessment of your current situation you will be ready to move onto the next stage of the plan.

Amend your retirement savings plan

Hopefully you already had one and all that you need to do is amend the plan. If you are starting a plan then at least you have recognised the need to take responsibility over your long term future. Amending the plan could be due to changes in the risk profile, the time horizon etc. If you started early like in your 20’s then you had a long time horizon and could afford to take greater risk. If you are now in your 40’s and looking forward to retirement in your 60s then not only has your time horizon shortened by 20 years but you will already have built up a pension fund that you want to grow further.

Best to check the asset allocation is well diversified and aligned to your long term investment objectives. The allocation that you opted for 20 years ago at the start of your planning may no longer be suitable for the current day


No matter what your needs are, it is recommended that you speak to your professional financial advisor and review your requirements and come up with a good long term plan that is appropriate for your own circumstances. They will be able to guide you when you answer the difficult questions asked when defining the retirement objectives but at least it will prompt you to think hard about what you want for your family once you are in retirement mode

A silhouette of a happy family of four people, mother, father, baby, and child, and their dog in front of a sunsetting sky, with room for copy space or text

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