Wealth Management for Different Stages of Life

Set specific financial goals.

Life comes at you fast, or at least that is the experience of many people. While there is no fantastic way to slow it down, preparing for your future allows you to make the most of your life at all stages.

An area that challenges many is financial planning. The advice that it is never too early to plan your financial future is accurate. However, detailed guidance for various stages is vital to maximise your opportunities and grow wealth for the short and long term.


Starting Out Your Financial Journey – Age 18-25

Early adulthood and the new independence that comes with it can be an excellent time in your life. However, it is also a pivotal time to begin laying the foundation for your financial future. You will need discipline to save instead of spending all of your discretionary income. Here are some tips to help you get started.

  • Track your money before making a budget – It only makes sense to find out what you bring home and where it goes. Usually, a month of tracking will give you a picture.
  • Create a budget you can live with in the long run – Build savings into your budget. 20% of what you bring home is the customary amount. However, if 10 or 15 per cent is the best you can manage, it is still better than no savings. Self-depravation for a short time usually leads to spending binges. It is okay to go out for brunch or hit the cinema. Just plan for it so you can enjoy the experience without debt and guilt.
  • Be careful with credit – Credit is helpful, and building good credit is necessary. Remember, it is a slippery slope, and a few credit purchases left to accrue interest add up to large debts that ultimately hold you back.
  • Have a few financial goals – If you know what you’re saving for, you will be more likely to follow through with the plan. A long-term goal could be homeownership, world travel, or starting a business. Those can seem very far away and may not motivate you to save. Set a few smaller goals to keep you in the habit of saving as you move towards your long-term goal.
  • Get solid personalised guidance – No offence to the ‘guy that’s good with money’ your neighbour knows, but working with a professional financial advisor is the smartest and safest way to determine your goals and how to meet them. The idea that only extremely wealthy people and those close to retirement work with wealth management teams is false. Regardless of age, turning to a sound financial team is always a great idea.


Building a Solid Foundation for Your Finances – Age 25-40

During this period, most people start to settle and make permanent choices. This is often when beginning a career, finding a significant relationship, buying a house, and starting a family are goals for many. During the fulfilment of these dreams, you will see there are steep price tags attached to some of them. You may wonder, “How do I get there from here?”

You are off to a great start if you have been saving and applying solid wealth-building principles before this phase. If you did not, it is not too late. However, planning your finances is challenging at this busy time in your life. The money you earn needs to stretch further to keep up with your increasing financial responsibilities. Halting an established savings plan is a typical response to this. No matter how it looks, this is not the time to stop saving money.

These tips can help you accrue wealth while still enjoying the life you are building.

  • Make a plan to pay down any debts you have – No matter the nature of these debts, the longer it takes to pay them off, the more it will cost you over time.
  • Build your assets – Investing is not exclusive to the world of property. Even though property is a favourite form of investing in Australia, you can also put your money to work for you through various managed funds or shares.
  • Protect your assets – You will always want to be in a position where you do not need to fear the unexpected. Insurance plays a massive role in safeguarding what is yours. Home and business insurance, landlord insurance, and income protection insurance are just a few types of coverage that can provide substantial peace of mind and financial security.
  • Look towards retirement – It may be hard to imagine retirement at this stage of life. You need to make plans to ensure you will have the lifestyle you want at retirement. Stay on top of your superannuation, including fees and levels of risk.

You still have time to make and implement a plan for future wealth at this stage of life. Working with a finance professional can help you stay on track with saving and build your wealth through wise investing. With a savvy expert in your corner, you will discover options you had not considered.

Wealth management strategies can vary greatly depending on an individual's life stage, financial goals, risk tolerance, and other factors.


Growing Wealth for the Long Term – Age 40-65

In this phase of life, it is common for significant life expenses to be paid down or possibly paid off. At the same time, children are becoming adults, and the household’s daily needs likely appear different. Now is the time to look at other focus areas as you plan for the future. These include:

  • Assessing and paying down any outstanding debts – This will free you as retirement is closer and give you money to apply to other expenses or investments.
  • Saving or paying for children’s education – Not every parent has a significant amount of money saved to hand over when children begin university or other schooling. If you want to be able to help your children with these expenses, you should work with your financial advisor to put things in place as soon as possible.
  • Preparing to help with aging parents’ expenses – For many, a portion of their time and money goes towards caring for elderly parents who do not have the financial means or physical capabilities to care for themselves. By working with a wealth management group, you can create accounts so you will be able to help without taking a financial hit.
  • Adjusting your investment strategy – As retirement grows closer, your investments no longer have the time to recover from volatile market shifts. Your financial advisor can direct you to safer options that will allow your money to grow.
  • Take stock of your dreams – By considering things you wanted to experience or accomplish from the past; you can work with your finance expert to make it possible to realise some of them.
  • Think about downsizing – People are often surprised when they discover the possessions they accumulated over time. Clearing unnecessary things can be emotionally and physically freeing, even if you are not ready to sell your family home. There are numerous charities eager for usable items. At the same time, other people allow relatives to claim any special mementos when cleaning out their homes.
  • Begin the framework for estate planning – Even if you are in excellent health, you must eventually face your mortality. This is a good time for establishing a will and creating trust. You may also want to consider the financial legacy you want to leave.


Planning for Retirement – Age 65 and Up

While no statute says you must retire at 65 years of age, this is the customary age used in examples. When you decide to retire, it will depend on several factors, including health, physical capabilities, job position, family responsibilities and a host of other circumstances.

As you close in on retirement, be sure to review your finances with your financial manager. You may need to make changes based on new or different goals or unforeseen circumstances. Ensure your money is still working for you and your wealth is growing. You will also be able to get advice about withdrawing funds from your super if you have not begun to do so yet.

Depending on your financial situation, you may be eligible to get monthly payments from the Age Pension. To receive Age Pension payouts, you must:

  • Meet the age requirements based on the year you were born
  • Residence requirements mean you reside in Australia permanently and in Australia on the day you file your claim for benefits.
  • Meet the requirements of the income test and asset test

Remember that the age pension is intended to help Australian senior citizens make ends meet. It is rarely enough to supply the means above necessities. This is why it is in your best interest to work with a finance professional and make preparations for the retirement lifestyle you desire.

Continuously monitor investment portfolios and adjust asset allocations as needed to maintain a balance between growth and preservation of capital.

As you can see, managing your wealth at various stages of life requires commitment and substantial knowledge. While you can do the research and make your plans without the help of a planner, many people feel more comfortable working with financial professionals. To learn more about the team at Grace Life and Wealth or to find out the many ways we can assist you in reaching your goals, feel free to contact us. We have assisted hundreds of people in reaching their goals and can also help you.


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