Everyone loves to plan for tomorrow.
If we did not have hopes and dreams for ourselves and our loved ones, we would be no more than automatons.
But alongside thinking about saving up for our children's education or what we can leave as an inheritance, we also need to think about what we need to live on today.
And this latter aspect – as financial advisers have taken great pains to point out to clients – can change drastically, depending on the fickle finger of fate.
Care needs are rising exponentially, but even if care needs are already accounted for, there is also the every day cost of living. Council tax, utility and service bills only tend to go one way. And, as anyone who ate a Wagon Wheel in 1989 knows, shrinkflation rules the world of comestibles: we are paying more now for less.
This means if we do want to leave a financial legacy to our children or grandchildren, advisers' advice is clear: we need to make sure that we are also able to live comfortably now.
So what sort of advice can financial planners provide to make sure that people can plan for tomorrow while paying for today?
Planning an inheritance
According to Roy McLoughlin, associate director at Cavendish Ware, "inheritance is the most peculiar of financial service subject matters".
He says: "While the old adage says don't take a penny over your allowance to the grave, we clearly have clients who wish to explore passing monies down the generations.
"However demographic forces mean that there is an understandable paranoia about running out of funds and thus the dichotomy of giving and keeping manifests itself."
Stuart Hopley, retirement expert for Scottish Widows, agrees there is a dichotomy between providing later-life care and an inheritance, while helping clients enjoy retirement goals today. He thinks clients get too caught up in planning for later life/inheritance planning that they forget to enjoy their retirement years.
Hopley comments: "The biggest challenge to later-life planning is nobody knows the end date. This means that the balancing act is always tricky as people juggle the risk of running out of cash with the desire to enjoy later life, but it’s always worth remembering why you built up that retirement pot.
"For most people it was to fund later life, inheritance is a nice extra but not the primary purpose for most people."
Hopley says it is important for clients to remember that saving for the future, therefore, takes on many guises, whether it is short, medium or longer term.
He explains: "Retirement planning and passing on an inheritance are key areas of future planning; however there is always a balance to be struck when saving and planning for the future.
