Generation X:

Financial Planning Checklist

By Patrick Malcolm

Members of Generation X are in a unique financial sweet spot. You’ve likely navigated significant career growth, perhaps raised families, and are now approaching retirement. This isn’t just about saving; it’s about strategising for the next phase of life.

Below, we have created a general financial planning checklist for Gen Xers. Think of this as a guide to ensure your financial foundations are rock solid and ready for the future.

This checklist provides a robust framework, but everyone’s financial situation is unique. Navigating these areas effectively often requires tailored advice.

Budgeting & Cash Flow: The Foundation

• Regularly Review Your Budget: Understand where your money is going.
• Set Financial Goals: Define clear short-term, medium-term, and long-term financial goals (e.g. home renovations, children’s education, travel).

Retirement Readiness: Are You on Track?

• Review Your Superannuation:
  • Consolidate Accounts: If you have multiple super funds, consider consolidating them.
  • Check Contribution Levels: Are you maximising your concessional contributions? Consider salary sacrifice to boost your super and reduce your taxable income.
  • Understand Your Investment Options: Review your super fund’s investment options. Are they aligned with your risk tolerance and time horizon?
  • Consider a Transition to Retirement (TTR) Strategy: If you’re approaching retirement age and still working, a TTR strategy could help you access your super while continuing to work, po-tentially reducing your work hours or boosting your super savings.
• Estimate Your Retirement Needs: Determine how much income you’ll need to maintain your desired lifestyle.

Debt Management (if not debt free): Smart Strategies

• Optimise Your Mortgage:
  • Review Interest Rates: Shop around for competitive interest rates. Even a small reduction can save you thousands over the loan term.
  • Accelerate Payments: If possible, make extra repayments or increase your regular payments to pay your mortgage faster.
  • Consider Refinancing: Evaluate if refinancing could offer better terms or consolidate other debts.
• Create a Debt Reduction Plan: Have a clear strategy for becoming debt-free.

Investment Strategies: Growing Your Wealth

• Diversify Your Portfolio: Ensure your investments are spread across different asset classes (equities, fixed income, property) to manage risk.
• Rebalance Regularly: Review and adjust your portfolio to maintain your desired asset allocation.
• Understand Risk Tolerance: Be clear about your comfort level with investment risk and ensure your portfolio reflects this.

Insurance & Risk Management: Protecting What Matters

• Review Your Insurance Coverage:
  • Life Insurance: Do you have adequate cover to protect your dependents? Or do you have too much cover?
  • Total and Permanent Disability (TPD) Insurance: What would happen if you couldn’t work again?
  • Income Protection Insurance: Protects a portion of your income if you’re unable to work due to illness or injury.
  • Trauma/Critical Illness Insurance: Provides a lump sum payment if you suffer a specified critical illness. Do you need this, or if you have it, is it still required?
• Update Beneficiaries: Ensure your superannuation and insurance beneficiaries are current and reflect your wishes.

Estate Planning: Securing Your Legacy

• Create or Update Your Will: This is fundamental. Ensure your assets are distributed according to your wishes.
• Appoint an Enduring Power of Attorney: Designate someone to make financial and medical decisions if you cannot.
• Consider Testamentary Trusts: Explore if a testamentary trust could provide your beneficiaries with better asset protection and tax advantages.
• Review Your Superannuation Death Benefit Nomination: This is separate from your Will and dictates who receives your super balance upon passing.