We’ve long been encouraged to think about our financial future: budgeting, and setting aside money for medium and long terms goals, as well as for our retirement. Now there is a growing interest in financial planning for future generations.

Some people are now considering whether they plan to use all of their nest egg to fund their retirement, or whether to keep aside money for loved ones and for other gifts. For those with the means to do this, the further question is whether to make these gifts during their lifetime or as part of their estate.

Here are some questions to consider:

  • How important is it to you to provide financially for your loved ones?
  • How confident are you about your financial circumstances?
  • Have you received financial advice about this decision and what you can afford?
  • What difference would it make if you were to gift money now?
    For example, would it make possible some significant things for your loved ones, like buying property or starting a business?
  • Are any of your loved ones in immediate financial need, or likely to be financially vulnerable in the future?
  • Are there special experiences with your loved ones that money could be spent on now?

Regardless of what you decide, this should form part of your financial plan. Try looking at your retirement income projections after you set aside any money you would like to gift away. See what the implications would be for your lifestyle and how this will impact your retirement. You may wish to seek financial advice and, if you plan to gift money away now, consider what level of financial risk you feel comfortable with.

Keep in mind that this will be a luxury for many people as the cost of retirement continues to grow. For many people, any special bequests may be modest and consist of sentimental items and the balance of their estate.

Regardless of your circumstances, careful thought and planning will continue to be the cornerstone of preparing well for the future.