A look to 2012

It’s that time of year again when we all start to reflect upon 2011 and also to think about what it is we want to achieve in 2012, both in our personal and professional life.

From a Financial Planning Perspective this is an ideal time to assess and evaluate the success or failure of the financial plans you may have started many years ago. Specifically you should seek to address and evaluate some of the following:

1)      Pension Planning.  Assuming you have some form of Pension Plan in place, can you accurately assess the following:

-          Is my pension plan on course to give me my desired level of income in retirement?

-          How has my Pension fund behaved during 2011 given the huge turmoil and volatility on world markets?

-          Am I happy to leave my Pension fund exposed to possible further volatility during 2012?

-          Do I know what type of Pension Funds I am invested in? Are they subject to a high degree of volatility?

-          Am I getting value for money with regards to how my Pension fund is invested?

-          How have changes in my personal or business circumstances been catered for within my Pension plan?

-          During the Celtic Tiger years you may have invested your Pension in riskier assets. Now that your business environment has become a more risky place in which to operate, have you considered taking some of the risk and volatility out of your Pension to compensate for these altered circumstances?

2)    Income Protection - if you have been putting off measures to enact some form of income protection, maybe now is the time to consider this again. Remember, if you are self employed you may not even qualify for state benefits should you be unable to work due to illness or injury. You will be forced to depend on your savings or may have to rely on your business continuing to pay you an income in your absence, even though you are no longer contributing to the success of the business. In the current tough economic environment, you do not want to become another cost to your business.

3)    Life Cover – This is the one area that most people tend to put on the long finger, and some never address it at all. Some business owners take the view that in the event of their death their family will at least have the Business to use in order to provide an income. Again, questions begin to arise in this respect?

• Will Business Loans still be outstanding?
• Will your family be in a position to run the business to earn an income?
• Will your family have the necessary expertise to run the business?
• What if you family wished to sell the business, is there a market for it now or would there be a market for it in the future?
• If you have a business partner/s, how would they feel about having your family as their new business partner?

Life cover can be used as a vehicle to resolve most of these issues if set up and structured correctly.

You may have intended to address these issues at the start of 2011, but never made the time to assess and consider the effectiveness of your current financial planning measures. I recommend that you make 2012 the year where you finally get some clarity and control over these key areas so another year is not lost. I wish you all a peaceful Christmas and hope 2012 will bring you another step closer to achieving your financial and personal goals.