One of the most rewarding parts of my role is helping clients create a clear later-life financial planning strategy. It’s about more than preparing for retirement – it’s about making sure they can enjoy life fully, free from money worries.

However, many people find this process overwhelming. They don’t know how to balance the need for steady income with protecting their assets for the next generation, while also planning for care fees.

While it’s natural to feel apprehensive, taking control of your financial affairs can lift a significant weight off your shoulders. With the right guidance and financial advice, later life planning doesn’t have to be difficult. Here are my top five tips to help you get started.

The first step is to think carefully about the kind of retirement you want. What would make retirement fulfilling for you? This might mean travelling, spending more time with family, taking up hobbies, or simply living comfortably. Having a clear idea of your goals will help you plan better.

Once you know what you want, take an honest look at your finances. Check your likely retirement income – this includes pensions, savings, and investments – along with your current costs, like debts or care fees.

Remember to factor in regular expenses, such as groceries, bills, and activities. It’s also a good idea to save some extra for unexpected costs, like home repairs or medical bills, so they don’t disrupt your plans.

After these steps, we can create a cashflow model. These models help map out your financial future and show how your money might last under different situations. For example, you could choose a guaranteed income, such as an annuity, to cover essential costs or put money into a trust or gift it to family. By reviewing your options, we can help you plan confidently for the future.

Getting professional advice early can make a big difference in later life financial planning. Many people delay these conversations, but waiting often limits your choices.

Seeking advice before retirement gives you access to more strategies designed for your needs. It also helps you plan clearly and confidently.

A common concern is how to pay for care fees later in life. With the upper capital limit for care costs set at £23,250, having assets above this means you may need to pay for care yourself. Some people try to avoid this by gifting large sums to their children, but this can cause problems if not managed correctly.

A financial planner can help you find better solutions. For example, an immediate needs annuity can give you a guaranteed income to cover care fees for life in return for a one-off payment.

This approach provides peace of mind and avoids dipping into your savings unexpectedly. Other options, like restructuring assets or using tax allowances, may also suit your needs. The earlier you start these discussions, the more time you’ll have to build a strong plan.

Inheritance tax (IHT) is a concern for many people, but it shouldn’t take over your financial planning. While reducing IHT is important, it’s just as critical to focus on your daily needs and overall financial security.

For instance, transferring your family home to your children might seem like a good way to lower future care fees or IHT liability, but it can come with risks. You could lose control of your property, or problems could arise if your children face financial or legal issues. Similarly, giving away large amounts of money without a clear plan could leave you without enough funds later in life.

A financial planner can help you find the right balance. This might involve using allowances wisely or arranging life insurance to cover IHT.

Taking a balanced approach to IHT is a key part of later life financial planning, ensuring your decisions support your retirement goals while preparing for the future.

Tax allowances are a useful way to reduce the IHT your estate might face. Knowing how to use these allowances well is key to effective planning.

One allowance is the annual gift exemption. You can give up to £3,000 a year tax-free, and if you don’t use it, you can carry it over to the next year. Couples can combine their allowances to gift up to £12,000 in a year when including the carry-over.

You can also give smaller gifts of up to £250 to as many people as you want each year, as long as they are different people. These gifts don’t count toward the £3,000 allowance and are a great way to pass on money over time.

For larger gifts, it’s important to keep in mind that they need to be made at least seven years before your death to be exempt from IHT. Keeping thorough records of all gifts is crucial, as your financial planner and solicitor will need this information to ensure everything is accounted for correctly.

Special occasions like weddings allow for extra tax-free gifts. You can gift up to £5,000 to your child, £2,500 to a grandchild, or £1,000 to another relative or friend. These gifts must be made before the wedding and only count if the wedding takes place.

Many people worry unnecessarily about inheritance tax (IHT), believing their estate will face a large bill. In reality, only a relatively small number of estates end up paying IHT.

If your total wealth is below £500,000 (£325,000 IHT allowance plus £175,000 residential nil rate band for your main home), or £1,000,000 for a couple, there is no IHT to pay. These thresholds mean many families, especially those passing down the family home to children or direct descendants, won’t need to worry about IHT at all.

Understanding these allowances can help ease concerns and ensure you focus on other priorities in your later life financial planning. A financial planner can guide you through these rules, helping you maximise the use of allowances while keeping your later life planning needs at the fore.

Retirement planning isn’t just about numbers. It’s about having the right people in your corner. A team of professionals working together can ensure every part of your later life financial planning is covered.

Your solicitor can handle wills, trusts, and powers of attorney. Your financial planner focuses on cashflow, investments, and tax strategies. An accountant can manage your tax returns, tax efficiency, and making sure your follow HMRC rules. When these experts work together, they can address potential issues more effectively and ensure nothing falls through the cracks.

It’s also essential to keep this team updated if your circumstances change. Regular reviews make sure your plan adapts to your needs, whether that’s changing investments, updating your will, or reviewing care plans. This approach makes everything simpler and gives you confidence your finances are well-managed.

With careful planning and the right support to guide you, you can create a later life plan that helps you approach retirement on your own terms. If you’re ready to have a conversation about later life financial planning, talk to us today.

Our knowledge of the issues, and experience working with later life clients, means we can create tailored strategies designed to suit your individual needs and help you approach later life planning with confidence.