When I ask my clients who are fathers, what their most important goal or objective is, more often than not it is to provide for their family should anything happen to them. Whether they be the sole income earner, or in a family with two members generating income, they want to ensure that if anything happens and they can’t work, they have the ability to still pay their mortgage, education costs, and put food on the table.
A person’s ability to earn an income is their greatest asset, and often for a small percentage of total income, they could cover up to 75% of what they’re earning. In more serious cases of premature death, or being totally and permanently disabled, they want to ensure that mortgages are cleared, any future education costs are provided for, and that lifestyle expenses are there for any surviving spouses or children to ensure that nothing is left out, for a predetermined amount of time.
Work life balance is also important for families, as they want to ensure that they provide for their families, but the mother or father can still have time to attend any dance recitals, sports events, or any other extra-curricular activity that their children participate in. As an example, I have a client in his 50s, who I have worked with for just on 10 years, and we created some investments outside of superannuation, so he could take some time off work as his son is an amazing basketballer, and needed help being taken to training and matches. He made some sacrifices earlier on, and is now reaping the rewards. I have the same situation of a client in his 60s, who has started a transition to retirement strategy to help babysit his grandchildren, as that is the next important phase in his life. Regardless of age or situation, you need to make sure that you have the work life balance. You are not what you do.
Happy father’s day to the fathers out there, and the mothers pulling double duty. Especially to my father, who retires at the end of the month. I look forward to punishing him on the golf course!
Steve Reynolds – Certified Financial Planner