When a loved one can no longer manage her financial affairs

When Sue’s planner noticed that Sue was becoming increasingly forgetful and tended to repeat herself in meetings, she realised that she would need to discuss this with Sue’s daughter, Elaine.  Both Sue and Elaine had been clients at their financial planning company for some time.

‘How will I break it to my mother that she has to be certified as mentally incapable of managing her own affairs?” was Elaine’s response.  She was devastated and felt overwhelmed by the weight of it all.  Where to start?

Elaine decided to take over the administration of her mother’s affairs as her other sisters do not live nearby.    Her already busy life became even more busy.  Managing her own affairs and that of her mother’s proved to be extremely stressful.  Paying bills, organising and managing carers and drivers, arranging meals, booking and attending doctor visits became the norm.

Elaine also had to take responsibility for Sue’s investment portfolio in addition to her own. Her planner encouraged her to consider handing the administration of Sue’s matters over to a professional administrator and made the necessary introductions.   Elaine was reluctant at first, feeling that she was somehow letting her mother down; however, following her first meeting with the administrators, she realised that it would be in everyone’s best interest to engage their services.

Since then Sue has been moved to a retirement facility. Sadly, but not wholly unexpectedly, her mental state has deteriorated, so she requires full-time carers.   Elaine takes comfort in the additional support offered by the administrator.

Sue is very fortunate in having a daughter nearby who is able to come to her aid.  This is not always the case and having a conversation with your planner sooner rather than later is a critical part of your financial plan.

Prepare before the crisis

Penny is a client who has taken it on herself to look after her disabled mother’s affairs.  “This handover of responsibility was organic, but I think, if personalities permit, it would be better to discuss these things with ageing parents before the necessity arises.  Once there is a crisis, emotions run high, and you don’t know if the person will be in a fit mental or physical state to make such decisions.”

Perhaps open the discussion in this way: “As you are getting older, the possibility exists that you could have a stroke and not be able to talk or manage your affairs. It may be a good idea to sign a Power of Attorney together.  Then, should the need arise, that would enable me to pay your bills and get what you need, without you having to fret about it.”

Encourage your children to attend at least one or two planner meetings with you to discuss plans whilst you are still mentally healthy and alert.  It is an onerous and traumatic process for all parties concerned.   Says Penny, “Considering increasing longevity and older people’s seeming denial about their stage of life and what lies ahead, with hindsight, I would have raised the subject much earlier about what would happen when my parents got older.  I think it would have been helpful to introduce the idea of possible reduced independence and what strategies should be adopted if that were to occur.  Perhaps even trying to get them to agree to go to look at different options at that time, so that they could see what they thought might work form them.’

Why not have this discussion, difficult as it may be, with your financial planner, so that you are equipped with the necessary information well before you may need it.

Article by Christina Forman, Certified  Financial Planner and Retirement Specialist at Chartered Wealth Solutions. We will post further articles from both Christina and a client dealing with this difficult but very important subject.

Minding your Ps and RAs

So, you have been saving faithfully towards your retirement.  You are confident that you have enough stashed away in the various investment vehicles: RAs, Pension, Provident, Preservation, Unit Trusts … and now, you salary has come to an end.  How do all of your investments come together to give you an income … and what are the tax implications?  Certified Financial Planner, Pat Blamire, chats to Michael Avery on the Classic FM’s Classic Business programme, to help retirees get the most out of their retirement savings.

Click here to access the Classic Business radio discussion.

Why not to leave too much to your grown kids

Author of ‘Entitlemania’ Richard Watts suggests that leaving too generous an inheritance to your children potentially has a divisive and damaging effect on your family.  In this article, he argues for what some clients have told me is their philosophy for spending money in retirement: SKI, or even, SKIN … Spend Kids’ Inheritance, or Spend Kids’ Inheritance Now! As always with our content, we offer it for your interest, not as advice.

Somewhere in our DNA as parents, we believe it is an act of love, generosity, or for some, contrition, to leave our children an inheritance after we die. And the more money we leave, we think, the better! But despite the wisdom and warnings of historical philosophy, religious texts and psychology, we refuse to heed the whispers and acquiesce to our irrefutable belief that our children will both benefit from, and appreciate our gift.

Beware . . . For everything you give your child, you take something away.

Yet parents often adjust their retirement budget for food, shelter, travel and recreation so they can “leave a little something” to their children. And many, modestly surviving on Social Security, even feel a twinge of guilt if they exit the planet saddling their children with funeral and burial expenses.

How inheritances can cause permanent damage to families

How would you react if I told you that your children would never speak to each other again because you left your three kids your house? What if the son you designated as your executor or trustee seized control of your assets and was sued by his brothers and sisters? What if the family business you built during your life dismantles the family after you depart?

But you say, “No! Not my family!” To the contrary. In my 35 years of managing wealthy families every day, the incident of permanent damage occurring to a family is most of the time.

And just in case you believe your kids are going to be appreciative of the money you leave, it takes about three days of grieving for your children to consider your inheritance all theirs. Remembering that dear old Dad and Mom provided them a unique opportunity of financial security lasts about as much time as it takes the bank to clear the inheritance check.

Carnegie, Buffett, Gates and You

One of America’s richest men, Andrew Carnegie, wrote an essay in 1889 entitled The Gospel of Wealth and lamented: “I would as soon leave my son a curse as the almighty dollar.” Modern-day financial icons, Bill and Melinda Gates and Warren Buffett, similarly plan to leave relatively small portions of their massive estates to their children, choosing to promote their kids’ long-term emotional well-being instead of feeding their materialistic cravings.

Money is supposed to provide a security blanket, not a blank check. Your lifelong achievement in building a nest egg is like a dam being built across a stream. For you, a lake of financial security forms behind the dam. Downstream, your kids often nest, staying close enough to the stream to take advantage of the flow you permit from the lake. Too often, inheritance of any size is like a break in the dam. The kids downstream have no sense of controlling the flood, and all can be swept away.

So how do we fix this? And how should we think about what we leave our kids?

Changing the question we ask ourselves

Perhaps we need to change the question we ask ourselves from “How much is too much?” to “How little is too little?”

Do your kids expect you to hand over the loot? If they do, try this: Sit down with your children in a family meeting. Tell them Mom and Dad have decided to leave all of their money, excepting the personal belongings, to charity. Or an alternative would be to leave all of your money to a family foundation where the kids are the directors who would designate the money only to charities.

How would they react? If they say, “Great, Mom and Dad, it’s your money to do what you want!” you have probably raised kids that can control the cash. If, however, after the meeting, they secretly convene to discuss what they’ve concluded must be your newly-discovered early-onset dementia, perhaps you ought to rethink your intentions.

Cold Money and Warm Money

One afternoon at my office in Southern California, a family of three adult children in their 40s called for a meeting with their financially-successful parents and me. The oldest spoke on behalf of his siblings and began: “Mom and Dad, there is something called warm money and cold money. Warm money is money you give us with love, while you are alive, and you’re able to witness our appreciation of the gift. Cold money is the money we get, whether you like it or not, after you’re both dead.” There was a brief pause. He continued: “Your children would prefer to have more of the warm money.” The following week, Mom and Dad came to me and asked to revise their estate plan, giving their kids substantially less.

There are two parts to this debate: the process of your disbursing an inheritance and the amount you give for inheritance.

The first is simple. Do not let your kids be the executors and trustees of your will and trust. You will find this is contrary to most estate planning experts’ direction, but they only draft wills and trusts, they rarely deal with the aftermath.

And sell it all! Even the family business! Hard to say that out loud, isn’t it? But you must separate your kids from being involved with your estate upon your death. The best solution is to have an independent party liquidate everything except the personal property, then divide the proceeds by the number of your kids and give them each a check. Your family will soon realize your actions kept them together.

How much to leave

The second question of how much to give your adult children is a little trickier. How affected would your kids be if you left them nothing? Put another way, how dependent are your kids on your financial support? The irony is that the ones who do not need your money will probably be okay and the ones who do will most likely be negatively affected.

A suggestion is to leave half your estate to your kids and the other half to charities, allowing your kids to designate to which ones they choose to give the money. Doing this will leave a valuable life lesson to your kids that will be remembered.

The Coloured Stickers Story

As to the question of how to divide your personal property and memorabilia, my friend Mel had the best answer. His father had passed away and when his mother was dying, she asked Mel and his siblings each to choose a different colour of sticky paper dots. They were then asked in succession to put their coloured sticker on something in the house they’d like to have after their mother passed — furniture, antiques, jewelry, silver and family heirlooms.

Each time it was Mel’s turn, he waved his brothers and sisters on, skipped his turn and continued the conversation with his mother. When all the items in the house were tagged with dots, the kids circled around their mother. Mel’s mom asked: “Mel, don’t you want anything?” He carefully peeled off one yellow sticker from his unused sheet of dots and gently placed it on his mother’s forehead.

Perhaps this is your last act of “tough love.” Don’t turn a blind eye to the reality that even modest amounts of money carelessly given to your children can have unexpected and corrupting results.

Money is like a narcotic; a little more is always welcome and the last amount never quite fills your present need. Give your children enough that they do something, but not so much that they do nothing.

Your legacy, and perhaps theirs, is in your hands

Demystifying tax implications of retirement funds

And drawing an income one day …

Whilst we are still working and earning a monthly income, we put away money towards our retirement. This is so that, one day, we no longer have to work and can start drawing an income from our retirement savings.   That is the plan, but I find that many of my clients are confused regarding how their different investments come together at retirement in order to provide them with this income.

Minding your Ps and RAs

The main retirement savings vehicles are Pension and Provident Funds, and Retirement Annuities.   The main difference between these different vehicles is that the former are employer provided funds, whereas the latter are typically used by self-employed individuals, or those people who want to increase their retirement savings.

In addition to these retirement savings vehicles there are also discretionary investments such as unit trusts, shares, tax-free savings accounts, properties, which supplement your retirement savings.

In terms of the Income Tax you are allowed to contribute up to 27.5% of your income towards retirement savings vehicles (Pension and Provident Funds, and Retirement Annuities), and to obtain tax relief on these contributions.   You do not receive any tax relief on contributions made to your discretionary investments.

When you reach retirement and wish to retire from your retirement fund investments, there are certain tax concessions that you are entitled to.   For Pension Funds and Retirement Annuities you are entitled to take, in Cash, up to one-third of these savings.   The first R500,000 of this Cash amount is tax-free, and the balance is taxed according to the following tax table:

  • R500,001 – R700,000 @ 18%
  • R700,001 – R1,050,000 @ 27%
  • Amounts in excess of R1,050,001 @ 36%

The balance of two-thirds needs to be invested in an annuity (pension), which will pay you an income in retirement.   As you were entitled to claim your contribution towards these funds as a tax deduction in the build up to retirement, when you start drawing an income from your annuity (pension), this income is taxable in your hands according to the South African Revenue Service published tax tables.

The rules for Provident Fund members are slightly different.   Previously they were entitled to cash in their full Provident Fund savings, which amount would be subject to the tax tables mentioned above (first R500,000 tax free, etc.).

However legislation changed on 1 March 2016 whereby, going forward, members of Provident Funds would be subject to the same rules as those members on Pension Funds and Retirement Annuities, whereby they could only take one-third of the value of their fund in Cash, and the balance of two-thirds must be used to provide them with an annuity (pension) in retirement.   There are certain exemptions to this requirement:

  • Anyone over the age of 55 on 1 March 2016, who was a member of a Provident Fund, would not be subject to these new regulations
  • In addition, if the fund balance of a member’s Provident Fund is less than R247,500, they will not be forced to buy an annuity with two-thirds of their Provident Fund savings.

In addition to your retirement fund savings, it is important that you also have discretionary savings which can be used to top up your monthly annuity (pension), and to pay for lump sum expenses such as holidays and new vehicles.

The plus of unit trusts

With a unit trust it is a simple matter to draw additional income or lump sums.   Units in the unit trust can be sold for this purpose.  It is a little more difficult to draw monthly income from a share portfolio as shares normally need to be sold in order to do this.   With a property that is rented out, you will receive the rental income on a monthly basis.   Where a problem may arise is when you do not have a tenant for your property, or the tenant refuses to pay and you struggle to evict them.

A Certified Financial Planner can assist you to navigate through these various decisions, and advise you on how your retirement savings should be structured, so as to take advantage of any tax concessions you may be entitled to, and ensure that you will have sufficient income in retirement.

How to hamstring your Financial Planner

And rob yourself in the process!

Retirement Specialist, Lynette Wilkinson, shares how she regrets to accepting a request from a client to create an estate plan – without being able to do a comprehensive review of their assets … and why she has resolved not to take on such an assignment again. She gives tips on how to make the most of your relationship with your planner.

Good intentions pave the way

One of the most satisfying things about my role as a financial planner is to guide clients in achieving their intentions with their money.  One aspect is creating an estate plan that will give effect to their wishes, as their legacy to their family.   This goal is difficult – no, impossible – to achieve when your client is reluctant to share details of his assets.

My clients were well-intentioned.  They shared a vision of wanting to teach their children sensible money management and to leave a  legacy for years to come.  Some of their assets are businesses that could well provide both an income and employment for their children and grandchildren in the future.

Their aim in meeting with me was to devise an estate plan that included reviewing their existing trust.  In the event of their simultaneous deaths, they wished their assets to be transferred into that trust. They brought to our first meeting their wills, their existing trust deed and their marriage certificate, to show whether they had wed in community of property or out of community of property, and whether the latter was with or without the accrual system – of course, this has a huge impact on the estate plan.

Disclosure makes the deal real

Unfortunately, while their goals were certainly noble ones, I was in no position to guarantee that those goals would be achieved. Why not?  My clients simply did not want to disclose detailed and relevant information about their assets and liabilities. I did not know the values of the assets, or whether they were owned or ceded. In the absence of these facts, I was unable to give comprehensive feedback, as I was not able to understand the values of assets, and the cash flow and tax implications of any actions we might recommend.

Why does this matter?

Let’s take the strategy of transferring the couple’s companies into trust on death.  Without knowing the values of the assets, I am unsure how much Capital Gains Tax would be triggered, and if so, how much liquidity (available cash) there is in the estate to pay that tax.  In addition, Estate Duty is likely to be levied against the estate as a result of the transfer of these assets into trust.  Were there to be insufficient funds to pay these taxes, the businesses might have to be sold in order to generate liquidity to satisfy SARS.

Were the business, however, to be sold rather than transferred, the monies could then more easily be placed in the trust, without attracting the same amount of tax.  Alternatively, I could advise that, in the case of one spouse predeceasing the other, the best route would be to bequeath the companies to the surviving spouse, thereby taking advantage of the Section 4(q) deduction, which exempts spouses of any Estate Duty on that asset and defers the Capital Gains Tax to the second dying spouse.

Partner with your planner

Of course, you can go online or to your local bank branch, and obtain an off-the-shelf Will – there you will be asked no questions, and any complications that may later emerge will only then be able to be resolved … often to the detriment of the estate and its beneficiaries.

I am also aware of a local legal company that charged R40,000 to redo a trust deed, and who followed much the same superficial process of not even looking at the wills, but simply creating a trust according to the clients’ stated wishes but without flagging any of the potential pitfalls.

The result of this kind of approach is, ironically, that the intentions of the clients’ are not fulfilled.

Clients approach financial planners because we hold the expertise that they most often do not.  It is therefore my moral responsibility to advise my clients in the best way possible … and that cannot be done with just a slice of the picture.

So, here are some tips on how to make the best of your relationship with your planner, especially regarding creating an estate plan:

  1. Understand that an estate plan cannot be created without your planner understanding your financial plan – the two work in tandem.
  2. Build a relationship of trust with your planner that will allow you to feel free to disclose the necessary information for her to devise your own unique financial and estate plan – she wants your intentions to be fulfilled, so help her to facilitate that.
  3. Share your dreams for your family and the generations that follow with your planner:
  • Is the intention for your businesses to generate income or employment or both for your children?
  • How much of the family’s wealth will the children use?
  • What is the purpose for creating generational wealth? To teach your children money management? To enable your children to be educated? To provide capital for their own businesses?

Knowledge of these intentions will allow your planner to set up your affairs practically to meet your goals; for example, a drafting a ‘family constitution’ will communicate to future generations what grandmother or grandfather’s intentions were in creating the trust.

  1. If you already have a trust, don’t allow anyone to review it unless they also want to understand your finances and to see your will.
  2. Partners must be in agreement regarding both their intentions and understanding the role and value of a financial planner.

A review of either a will or a trust deed is of no value to the client (or the planner, for that matter) when done in isolation.  You will understand then, my reluctance to take on any future requests to do so without an understanding of my clients’ assets and liabilities, and a broader view of their finances.

lynette-wilkinson-chartered-wealth-solutions-retirementLynette holds a CERTIFIED FINANCIAL PLANNER ® status and obtained a Post Graduate Diploma in Financial Planning from the University of the Free State in 2007. She completed an Advanced Post Graduate Diploma in financial planning, specialising in Estate Planning and Risk Management in 2012.

Lynette keeps abreast of the latest industry changes through her membership of the Financial Planning Institute of Southern Africa (FPI), the Society of Trust and Estate Practitioners (STEP) and the Kinder Institute of Life Planning.

Lynette believes in real relationships.

Her professionalism and empathy assist her in the discovery process to define her clients financial and lifestyle goals, allowing her to create a global and strategic financial plan for their unique needs.

“I wanted to move on with my life”

Andre du Plessis was a successful advocate in Johannesburg, with a thriving practice and a blossoming young family. 

Then, aged fifty, he took the remarkable step of walking away from the practice of law.  “I left for several reasons, some of them to do with things I disliked about the profession, but mainly I wanted to move on in my life.  It was a full reassessment.”

andre-retire-successfullyReassessment is a word he uses with passion.  “When someone reaches fifty, there is no excuse not to reassess your life,” he says.  “You need to challenge your beliefs, snap out of your routine.  People say they are too busy or too comfortable.  Usually they are too lazy or simply too scared to look at their situations.  Don’t think of it as a crisis, rather as a reinvention of yourself.”

For Andre, part of this process was to interrogate his relationship with money. “A person needs to know what money means to them.  While you are living you can spend it, save it or give it away.  I found that eighty percent of my concerns in life were about money.  This was unhealthy.  The percentage should have been less than twenty.”

So he decided to engage Chartered Wealth to set up an estate plan.  “I soon found that estate planning is far more than just setting up a will.  Most people have a basic financial plan.  I had that.  The next level is estate planning.  I wanted that.  But Chartered opened me up to the highest level – Life Planning.”

The concept revolutionised Andre’s thinking.  “The Life Planning process was amazing.  I realised that money is just one part of my life’s spectrum.  My entire vision changed and money took its rightful place amongst everything else.  That was the essence of the reinvention of my life.”

The way Chartered managed the actual estate planning process was highly impressive.  “It completely over-exceeded my expectations.  The quality of the expertise and service was greater than I have ever encountered.”


Lynette Wilkinson, Financial Planner at Chartered Wealth Solutions, who managed Andre’s estate plan, worked wonders for him.  “Her attention to detail was impeccable and she took ownership of the process as if it was her own.  Where necessary, she brought in outside experts to help.  We worked on a twenty plus year horizon, meaning that this was a multigenerational approach to financial planning.  More than that – it was not a once-off exercise and she remains integral to my entire financial management process.  It remains a highly successful collaboration.”

Andre’s advice is crystal clear.  “You will know when the time is right to reinvent your life.  See it as a positive move and make sure that full financial life planning is central and it is not just a money exercise.  And, most importantly, get the right partners to help you along the way.

“Having this deeper understanding frees up more time for me to live. I also have the peace of mind that comes from knowing I have a plan for my money and it is working to give me the life I want.”

Six tips for raising money-wise adults

As a financial planner, it is seldom that a conversation with my clients concludes without the 12345subject of their children’s financial stability emerging.  As a mother of two sons, I find myself sharing many of my clients’ concerns, even into our children’s adulthood. 

These concerns, it seems, are with good reason.

A US study has revealed a pattern regarding the passing on of wealth within families:  the first generation makes the money, the second maintains the money, and, in 90% of cases, by the third generation the money is gone. This gradual decline is captured in the cultural proverb: “from shirt sleeves to shirt sleeves in three generations”.

Are there certain practices that we as parents can put into place to help our children create their own financial freedom?  How do we balance messages of recognising the importance of money and of guarding against materialism?

Teaching responsible money management 

My son, Ryan is extremely competent, has a strong personality and holds down a very demanding job.  I have no doubt that he would cope were I no longer around.

Donovan is a gentle man, with a dream of being a missionary … but with a wife and tiny daughter, his idealistic nature is simply not putting food on the table.  I worry constantly about how he would manage were I absent.

I am fascinated at how some of the younger generation are so capable and competent whilst others are just not ready to take on the responsibilities of adult life. And, of course, proper money management is very much a part of creating a successful career and family in our adult years.

I have distilled from my wider reading some great tips for helping parents create the ‘scaffolding’ for their children to establish a healthy and responsible attitude to managing their money.

  • Talk to your children about your values, your money, your life. Do they know what sacrifices their grandparents and parents made to create lives of relative ease, or even indulgence, for them? Do they make a connection between hard work and prosperity? Do they know that work is a great source of a sense of personal achievement?
  • Allow them to be different to you. They have grown up with a completely new set of social norms, even though you have passed on your values. They may, for example, value a variety of jobs over the kind of stability or loyalty you have treasured. That’s OK – their generation is going to live longer and will probably have to be job-nimble.
  • Teach them to be independent. A sense of control over their own lives engenders confidence and a belief that their actions and attitudes impact their world. Model healthy and independent relationships yourself; let your kids know it’s fine to be separate – be alone and sometimes to disagree; seek opportunities to show your own perseverance in the face of difficult tasks.
  • Don’t take their troubles away – they need to work through their own trials and tribulations in order to grow. The Monarch Butterfly needs to force its own way out of the chrysalis in order to strengthen its wings to fly, or it will not be strong enough to survive.
  • Tell the family stories, especially to your grandchildren, of what life was like when you were small – this is the glue that holds a family together, and also helps to maintain the family history for when you are not around one day.
  • Make family memories: give with a warm hand. Plan and share special celebrations together.

Imagine a gift that you could give to your children, even your adult children.  This gift will enhance their self-esteem, create the foundation for a confident approach to life, and develop skills that will stand them in good stead throughout their lives.  This is the gift of being financially responsible.

1234Pat Blamire is a Chartered Financial Planner, a CFP® professional, and has a post-graduate Certificate in Advanced Taxation, and a post-graduate Diploma in Financial Planning. She has a passion for inter-generational wealth, and the responsibility that goes with passing on money to the next generation. In this article, she draws from many years of financial planning for clients, and shares a lesson on helping our children live abundant lives

Working with a CFP® Professional Means Peace of Mind

When South Africans get asked about major reasons they would consider working with a financial planner, they most often cite that financial planners help consumers by demonstrating how consumers could save money (78%), coming up with a tailored long-term plan (76 %), and providing peace of mind (76%). This is according to the recent Global Consumer Survey conducted by the Financial Planning Institute of Southern Africa (FPI).

The Financial Planner recently spoke to Chartered client, John Arnesen, who shared his experience about how he found that “peace of mind” when he opted to work with a CFP® professional.

Planning means peace of mind

A lingering memory from my childhood is being encouraged by my father to save. Earnest young man that I was, I took his advice to heart, and was a diligent saver even while at school.

Very early on in my working life, at age 23, I also learnt that standard pension contributions would not be enough for a comfortable retirement. As a result, at the time, I responded to a Southern Life advert and bought some polices that sounded ideal for my needs.

The advice advantage

What was missing then − and remained missing until 2006 − was proper financial planning. For nearly 30 years, I arranged my finances myself and trusted a number of commission-driven product salesmen to get the best return on my investments. I now realise that I lost out heavily in the process and, sadly, had no recourse.

My approach to my future financial security changed when I joined the Financial Planning Institute in 2005. I quickly realised the very significant difference between what is known as a broker – more of a salesperson − and a qualified financial planner or advisor … or as FPI refers to these professionals: a CERTIFIED FINANCIAL PLANNER® professional. By 2006, when I had just turned 50, I recognised that I would have to do something drastic were I going to be able to consider retiring by the time I was 60.

It was in 2008 that FPI awarded John Campbell, CFP®, the accolade of FPI Financial Planner of the Year. I decided then that John was my “man”, John and Meryl Arnesen and asked him to help me take control of all my financial planning affairs.

The process was painful as my wife, Meryl, and I had to face up to the realities of havingbeen gullible and far too trusting, and, in addition, not having given our retirement planning sufficient focus.

John helped us by putting a very clear and focused retirement plan together. We had to transfer monies out of non-performing products and carry “losses” in the short-term to consolidate the portfolio. In the process, we paid planning fees only. John was very clear that Chartered Wealth Solutions would not take any product commission whatsoever.

Meryl and I also underwent the life planning intervention with Kim Potgieter, CFP®, – another challenging process, but, as our lives have borne out, an equally valuable one. We struggled with the incredibly tough questions, but I have no doubt that this process helped us to get through many other difficult moments in the subsequent 10 years.

More recently, the real value of our first proper financial plan and subsequent financial plans (always incorporating retirement and life goals) compiled by

John and, following him, senior financial planner at Chartered, Pat Blamire, CFP®, have proved to be spot on. In fact, as anyone would hope, every annual plan was exceeded year by year.

Empowered by choice

So it was, after 10 years, I was able to meet up with Pat on my 60th birthday and hear these absolutely fantastic words: “Based on your financial needs and looking at your graph, you and Meryl can retire … Congratulations!”

The reason why this was exciting news was not the fact that we could stop work, but rather that retiring was a real option for us, when we wanted it.

In 10 years, Chartered had brought our financial affairs into order and set them on a solid path for the rest of our hopefully long lives!

Far more than that, Chartered had, over that decade, helped us prepare ourselves for retirement; now we feel ready to negotiate that transition when the time is right.

The lesson is clear: every couple or person must get the help of a professional financial planner, one that has no interest in securing revenue from anything other than the costs related to compiling and managing a financial plan.

The challenge is to shift the perception that is deeply engrained in the ordinary person’s conscious and sub-conscious mind that somehow they should not need to pay for a financial plan.

My advice is simple: pay for the plan and let your professional financial planner take the worry out of your future retirement security and help you achieve your dreams…

I leave you with this thought-provoking question: why are you happy to pay an architect, engineer, lawyer, accountant, doctor, but think you don’t need to pay a financial planner? Especially when you consider that, second to health, wealth must be the most important thing for one to take care of.

Through a son’s eyes

Chartered articled planner, Tom Brukman, would like his parents to know how he views them in anticipation of tomtheir retirement. Here is what he says … it may lend perspective regarding how your children are feeling about your life transition.

 I want my parents to relinquish the gnawing concern that many parents of adult dependents share:  do my children have enough money?

Freeing parents from this potentially debilitating worry can only happen through honest and open conversations about their money and mine.  The opening of dialogue allows parents to understand, not only the financial position their children are in, but also and more importantly, their own financial position as adults as they move ever closer to retirement.

How so?  Parents need to know what financial commitments are to be included in their planning. My parents have a financial plan, and supporting me and my brothers is not viable (or expected!) in that plan. There is a marked difference between the following two scenarios:

  1. My parents being financially stable, but having to support their sons when they are called on to do so; and
  2. My parents being financially stable because they follow the provisos of their financial plan, free of shifting obligations to dependants.

The substantial gap between these two outcomes, and the peace of mind that accompanies the second situation, motivates me to plan for myself.  I can thereby free my parents to enjoy their retirement after they have sacrificed so much to get me to a place where I can be independent.

The most effective way we found to create this positive outcome was having that crucial conversation – the lifting of any guilt or animosity has been a welcome and unifying result. It is a matter of overcoming any perceived awkwardness around the topic of money, and simply being honest.

Helping our children live fulfilled lives

I am guilty of it, perhaps you are also … and I wonder if we are taking away from our children the resilience to facepat life’s challenges, and, ultimately, the chance to live a fulfilled life.

I am referring to the help that we so often and so readily offer our children when we feel they need it.

We all want our children to live happy, secure lives, and it is natural that we want to help them when they stumble.   In a lot of my interactions with my clients, our having established that we are on track with a workable financial plan, the conversation drifts to discussing the children and their financial preparedness for the rest of their lives.

The snagging spot is often, dare I say it, not the children, but well-meaning parents (I am not without blame here, I suspect!) who feel guilty if they are not helping their children overcome their (mostly, financial) difficulties.  It so frequently seems that a parent’s way of showing love is by smoothing the path through challenges.

A recent book that cites on an ancient legend has created an epiphany for me!

The Voice of the Rising Generation by James Hughes et al. was an excellent read.   The poem The Odyssey, composed by Homer almost 3,000 years ago, is woven throughout the authors’ message.   They use the poem as an analogy, referring specifically to Odysseus’ son, Telemachus, and his life journey when he goes on a quest to find his wandering father, and, in the process, to find himself.

Meanwhile, Odysseus comes across an island of the Lotus-Eater people – this is the part that really resonated with me!   On eating the Lotus, the islanders forgot all about any kind of personal desire to strive and struggle, and they became content to spend their lives grazing on the flower.

Do you see the lesson?

The authors contend that, where we have brought our children up with wealth, and possibly spoilt them, in the process, we have taken away from them the desire to rise up on their own, and live challenged and fulfilled lives.  They, as it were, are feasting on the Lotus flower, all need to carve their own success undermined by the lethargy of aimlessness.

While these ‘privileged’ children may enjoy the ease that easy money buys them, at some stage I am sure that introspection will creep in, and the frustration of boredom and not being fully challenged will start to unsettle them.   The spell of the Lotus flower will need to be broken in order for them to rise to live challenged lives, and not let complacency stagnate them.   Questions will start to surface such as … Is this all there is to life?  Could there be something more?   What would that something look like?

Wealth can also make us forget why work is important (that sense of personal achievement), what authentic relationships are like and our dreams of being the best of us we can be.

For us to live fulfilled lives, we must break the spell of the Lotus flower and relish that sense of self-actualisation that comes from recognising and developing personal strengths that we harness to overcome our challenges.