Who doesn’t love a good calculator – one of those whizzy tools on the internet that with the simple addition of a few details, tells you everything from how NHS hospitals perform in your area to how much a funeral costs. So I was thrilled with the BBCs latest life expectancy calculator showing how long you are expected to live based on where you live in the world.
By simply entering your age, gender and the country you live in, the life expectancy calculator will work out in a flash how long on average you should expect to live and what percentage of your life will be healthy.
An ageing world
The purpose of the life expectancy calculator isn’t just to thrill saddo’s like me with another gadget to play with; the purpose is actually to highlight that life expectancy is growing on a global scale – so much so that a person born in 2016 will live on average seven years longer than someone born 25 years ago.
This revelation is without doubt something to celebrate however it does come with a strong underlying message – longer lives equals better life planning, especially in older age so if you haven’t started thinking about planning for your ‘golden years’ yet, now’s the time to start.
Deal with your finances
In many households the responsibility of sorting finances out and paying bills falls on one person. This can be problematic if suddenly that one person is not around, so ensure you keep a list of finances including income, debts, savings and investments so if the worst were to happen, it is easy for someone to sort out your affairs.
Budgeting for life
Of course a longer life means being able to fund your later years, so don’t stick your head in the sand – work out a budget and stick to it. Can you afford to continue living in your home? Do you have outstanding debts that need to be paid off? Exactly how long will your money last? Can you afford to live longer?
If the answer to the last question is no, then you may need to seek help perhaps through citizens advice about your situation and also check that you aren’t missing out on benefits available such as housing benefit, pension credit or heating benefit. You may want to talk to your family about downsizing or equity release schemes which allows you to release money tied up in your home.
If you have retired or about to retire, are you making the most of your pension pot? The amount of income you could get varies depending on the pension or annuity provider, so it's worth shopping around.
Budgeting for death
Funeral costs are rising way above the rate of inflation so as well as thinking about the cost of living, it is also important to think about the cost of dying and who exactly will foot the bill. No one likes to think of their family struggling whilst paying for a funeral so explore the options available to you.
A funeral plan is a way you can arrange and pay for your funeral at today’s prices. This means you save your family the financial worry of paying for a funeral as well as the emotional burden of having make funeral arrangements.
If you are on a tighter budget you may want to consider whole of life insurance or an over 50 life insurance plan. An over 50 guaranteed life insurance plan pays out a cash sum when you die that can be used to help with funeral costs. You are covered for the full cash sum after one or two years but pay into the plan either until you are 90 or you die, so there is a chance you could pay more in premiums than the cash sum paid out.
Using savings or proceeds from the sale of your house is an option when paying for funeral costs however be aware that funeral inflation has been increasing at more than 5%, which unfortunately is a lot higher than inflation. In addition, if you are relying on the sale of property this can obviously take time, so your family will probably have to fund the funeral costs in the first instance and then get the money back once the property is sold.
Prepare for the unknown
We don’t have a crystal ball so none of us know what lies ahead for us in terms of health and whether there will come a time when mentally or physically we become too ill to manage our finances.
It is therefore important to think about putting plans in place before the situation arises, nominating a friend, relative or professional adviser as Power of Attorney.
There are two types of Power of Attorney:
Ordinary Power of Attorney – this type of power of attorney gives the nominated person the temporary right to handle your financial affairs, perhaps whilst you are ill or in hospital.
Lasting power of attorney – known as ‘Lasting Power of Attorney’ in England and Wales and ‘Enduring Power of Attorney’ in Scotland and Ireland, this gives the nominated person the right to handle your affairs on an ongoing basis, even if you become mentally incapacitated.
For more information on Power of Attorney please click here
Make a Will
If you haven’t already done so, put a Will in place so you can be sure your wishes are adhered to and your money, estate and belongings will go to the people you want them to. Without a Will in place the law will decide how your estate will be distributed and if you have no living relatives, your assets will go to the Crown.
What with marriage, divorce, couples cohabiting, death, children, step children and grandchildren we are all living more complicated lives, so don’t leave it to chance. Make a Will today.
So the message is clear, think about the cost of living and the cost of dying today and start to put plans in place so you can relax and enjoy the years ahead. As for me – I’m off to Singapore to eke out a few more months as for a man of my age; it has the longest life expectancy in the world!