Whilst we are all aware of the age differences between the generations, we might not have thought about how our age bears any relation to our investments. However, the number of years you have left to invest can help you make the right decisions about how much and where to put your money.
20s and 30s
The financial habits you form during these years will determine whether you have a secure retirement, or will have to work later in life. Investing at an early age, rather than keeping all your spare cash in a bank or building society account that pays low rates of interest, can be a good long-term strategy. Assuming greater risk can in return offer the prospect of a bigger return. You have plenty of time ahead of you to ride out the inevitable peaks and troughs in the stock market and to recoup any temporary losses you might make. However, if one of your financial aims is saving money for a short-term project like a house deposit, to reach this goal you may want to opt for less risky investments.
40s and 50s
These are likely to be your peak earnings years, and it makes sense to build up your pension and investments, and make sure you have plans in place for your retirement. These can also be the years when there are greater calls on your cash, such as raising a family or taking care of elderly relatives. It’s important not to overlook your own needs whilst looking after others, and having a regular financial review can ensure you keep your investments on track. Remember, you only have so many working years left to provide for your future.
60s and over
Not so long ago, many people would stop work and stop investing in their 60s. Today, more people than ever are working on past what would once have been considered normal retirement age. So, you may want to keep investing, gradually focusing more on income-producing stocks and shares as you wind down to retirement. Plus, you may be more concerned than you were in your younger days about protecting your wealth from the vagaries of the stock market. In short, you may want to adopt a lower risk profile.
Whatever your age, getting good advice can help you make the right investment choices for your future.