Just recently the world received the news of American actress Hilary Swank announcing the arrival of her newborn twins – a girl and a boy – as she became a mother at 48. The actress joins a growing number of celebrities who became parents in their 40s including Naomi Campbell and Janet Jackson.
Although there are various reasons and benefits to delaying parenting such as climbing the corporate ladder, travelling, etc. However, without adequate financial planning, having kids later may result in a financial “bottleneck” says Farzana Botha, Product Specialist at Sanlam Savings.
According to Farzana, although there may be very good reasons to postpone starting a family, it is important to note the potential financial implications when you make this choice.
Farzana says delaying parenting could lead to a financial ‘bottleneck’ later in life unless you have drawn up a well-balanced financial plan that considers both your present and potential future circumstances.
For some people it could be financially beneficial if you used your time before starting a family to build a good financial foundation. Farzana recommends considering the following when starting a family in your 40s:
Managing your financial priorities may be challenging.
Create a balance between competing financial demands. If you have children in your 40s your children’s requirement for tertiary education may come at a time when you are thinking of retiring, for example. Which do you save for first? “Working with an adviser can help you balance these priorities,” says Farzana.
You could become part of the ‘sandwich’ generation
Many South Africans provide financial support for extended family members such as elderly parents, grandchildren and nieces/ nephews. To avoid this impacting your financial and emotional health, you need to factor this future possibility into your financial planning.
Plan ahead in case of unexpected circumstances
If you pass away unexpectedly, your family may face financial hardships. As you get older, health issues are more likely to surface. Therefore, it is crucial that you plan ahead for your family’s future in the event that something might happen to you.
Income protection, life insurance, and critical illness and disability cover are especially important.
Drawing up a will is also crucial, which should include the appointment of guardians to look after your children. Bear in mind that your parents and even your siblings may be at an age where they won’t be able to take over this role.
“If you postpone parenthood for whatever reason, the most important factor to bear in mind is that your planning timelines will be different to those of people who have children at a younger age. It is essential to consult a professional financial planner who can help you draw up a personalised financial plan taking your specific needs and circumstances into account,” concludes Farzana.
