INVESTMENT LIFE STAGES

I cannot believe that we are in May already – goodness where did the time go?!

The first three months of this year have been challenging – and I struggled to keep my head above water. Work, in particular, became extremely demanding; and trying to manage studies, family and a personal life became an uphill battle. After a 3 month break (coupled with low activity on social media), I am happy to be back here doing what I enjoy the most – writing and sharing insightful topics with you.

I am also grateful that I had an opportunity to visit Zanzibar for a few days during April. That holiday was nothing short of amazing and totally therapeutic! I feel rejuvenated and looking forward to returning to work; and smashing my goals. I’m well on my way. I feel positive about my career, as that’s where my focus has been this year.

My birthday falls in the first quarter of the year, and at every birthday I reflect on the previous year and I set goals for the year ahead. This brings to me to today’s topic: Investment life stages. I found this part of my Investment Planning quite module interesting and easy to grasp; and I thought I’d share these with you.

I agree that the different stages of life do not depend only on age, but also on factors such as marital status and family situation. Unforeseen events can also change one’s financial situation drastically.

Below are the different investment life stages, and I have expanded briefly on each stage:

YOUNG ACCUMULATORS

These are people in their 20s who are just getting started.

People in this life stage should be concerned about:

  1. Paying off debt and staying out of debt.
  2. Start saving towards their retirement savings plan (its never too early to start).
  3. Setting up emergency fund (funds should be placed in a highly liquid product).
  4. Saving for short-term goals.

Although retirement is still a long way off, people in their 20s should take advantage of compound interest over this time.

MULTI-TASKERS (Me! I fall in this category)

These are people in their 30s and 40s, who are simultaneously saving to cover university fees for their children and for their own retirement. People in this category should have an updated Will in place and a sound emergency fund.

PRE-RETIREES

People in their 50s and 60s who are strategising about retirement. Their main priorities should be:

  1. Saving aggressively towards retirement.
  2. Estate planning.
  3. Paying off debt.
  4. Assessing retirement readiness.

Assessing retirement readiness entails taking stock of were one is with their retirement goals. Where necessary, delaying retirement could be a good strategy.

RETIREES

These are people in their 60s and 70s who are already retired. The main focus at this stage is the structure of the portfolio from which the income is drawn. Experts say (and I share the same view) that exposure to equities must be reduced to limit the effects of big market fluctuations.

If you haven’t already done so, I’d recommend that you speak to a financial advisor to chat about the above; and develop a plan based on your unique circumstances. It’s never too early or late to start having these kinds of discussions. I personally wish I had them much early in life.

Wishing you everything of the best in your respective careers, and endeavours.

_______________________

Disclaimer: The article is provided for general information purposes only. Whilst care has been taken to ensure accuracy, the content provided is not intended to stand alone as financial advice. An expert should be consulted for advice based on the facts and circumstances of each transaction/case.

The contributor (Kim Nokwaza) shall not be liable for any loss or damages suffered by anyone who relies on or acts upon the information contained in this piece.

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