5 Life Events That Require Financial Advice

We all need help sometimes. Some of us, more often than others. But, when it comes to financial advice, there are a few specific transition points in life that necessitate speaking to a qualified financial adviser. These are times that can alter your current financial status, but are also emotionally charged periods. A level-headed professional, in this instance, can give you the objective perspective you need.

5 Life Events That Require Financial Advice

1. Making a Career Move

Whether you’re starting your first job, getting a promotion, a demotion, or changing career paths entirely, you’re going to need financial advice. Career moves mean a change in income and there are tax implications that we can forget to factor in. Sometimes a raise can push you into a new tax bracket and a financial adviser can help handle the change.

Yes, he or she will likely tell you to increase your retirement contribution, but for good reason. A financial adviser can ensure you benefit from tax allowances and exemptions efficiently. Nobody wants to pay SARS more than they have to.

If you’ve just left college, create a financial plan with an adviser you trust, and get a sharp edge on most of your peers.

2. Getting Married (Or Divorced)

Saying ‘I do’ brings with it a host of changes. Name changes, in some cases living arrangements, but also changes in the way the law (and taxes) applies to you.

With this amount of change it’s worth having an objective financial expert review your assets, goals, and taxes.

Below are a few of the legal advantages of marriage:

Duty of support: You and your spouse have a corresponding legal duty to support each other. If you lose your job and your ability to contribute to the household, your spouse is legally obliged to support you within his or her means.

Tax savings: If you buy a home together (and you’re unmarried) and one parter provides the majority of purchase capital, they are liable to pay 20% donations tax. In the event of that partner passing away, the surviving owner could face estate duty and capital gains tax on that property. But, if you are married, donations tax is not payable between spouses.

Maintenance after death: In the case of a spouse dying, the surviving spouse has a legal right to claim maintenance from the deceased spouse’s estate.

Inheritance: Should your spouse die without a will, the law protects the surviving spouse who has the legal right to inherit.

Property division on divorce: When spouses end their relationship, each is entitled to a portion of the property so that one spouse is not left with everything, while the other is left destitute.

3. A Death In The Family

When a family member dies and leaves behind an inheritance for you, it’s likely you’d want to put it to exceptionally good use. As it’s an emotional time, it’s best to consult your financial adviser who will help you tick the right boxes. For instance, topping up your emergency fund and paying off debt doesn’t sound special, but it’s sound financial practice when coming into some money.

Thereafter, the financial advice you receive will involve creating a balanced and diversified portfolio. You want to make sure your attitude to risk, your financial goals, tax shelters, and any legislation changes, are all accounted for.

4. Having Children

Hormonal changes, the pressures of keeping your children alive, the stress to provide and support, and not to mention work days after sleepless nights. This is not the recipe for making sound financial decisions on your own.

The real financial impact of having a child isn’t immediate. The cost of nappies and preschool is child’s play compared to the cost of higher education, or leaving behind a sizeable inheritance. A financial adviser can help with planning for down the line, and the sooner, the better. An adviser can also help navigate trusts and life insurance in preparation for the day you’re no longer around to provide for your children.

5. Retirement

Retirement is one of the most important areas of financial planning. Decisions around annuities have far-reaching implications and can sometimes be definitive. So, it’s a good idea to get help at this point.

A financial adviser will help you make sense of a vast number of investments, strategies, and income options, and choose what’s right for you. But, an adviser can also help you manage and prepare for possible risks by looking at insuring against ill-health and providing for long-term care. And, of course, pay no more tax than is absolutely necessary.


Insurance Guru

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