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Securing your future financially takes careful planning, and without a strategy, you could end up with monetary troubles later in life when your capabilities are limited by age. Beginning to invest early on in life is always a smart choice to ensure that you are prepared for every contingency that may befall you.
However, it takes meticulous preparations and execution to see your investments bear fruit, and to undertake such an ordeal may appear intimidating. With countless options from equities investment to a savings plan available, it gets too perplexing to determine what suits your needs best.
Here’s a guide to help you invest to earn higher returns at every age.
Most people in their twenties are recent graduates receiving their first pay cheque having freshly experienced financial independence and without a fair idea of where and how to allocate their earnings. It is important to understand where your money goes in order to cultivate the habit of saving and investing sooner in life, to witness its outcomes when you are older.
During your twenties, your investment plan may include a vibrant risk portfolio to help you figure out the mistakes in advance, giving you a buffer period to restore your savings in case you incur a loss. Create a blend of:
Liquid funds - to help you maintain cash flow.
RDs & SIPs - to give your savings time to grow and feed your risk appetite.
Provident Fund - to take the first step towards a safer retirement.
Life Insurance - to leverage your young age and get affordable premiums, especially with term insurance and guaranteed1 returns plans.
In your years of youth, say when you are a 25-year-old, probably making your first investment plan, invest without fear and always be prepared to face the worst.
Individuals in their thirties have usually settled into their career and are able to generate a comfortable income. Financial goals become much clearer as we cross 30 years of age, and requirements of buying a home, vehicle purchase or perhaps a seed fund for a business idea grow closer.
During the thirties, smart investment with a diverse portfolio should be the ideal choice. Most people have learned from their mistakes and have a fair understanding of what suits them. Depending on your habits in the previous decade, include:
Stocks - to grow wealth with a growing securities market.
Guaranteed1 income plans - to ensure a guaranteed1 stream of income to supplement your primary source.
ULIPs - to have a combined plan for life cover and market-linked investments.
Continue contributing to SIPs and RDs you may have started earlier and try to increase coverage or add life insurance riders# to your existing insurance plans.
The forties come with a lot of responsibilities, and financial security at this age is critical to keep you and your family protected. Income levels begin peaking with people taking on more experienced roles, and the influx of higher incomes must be allocated wisely.
During the forties, safer investment plans must be prioritised, and a careful assessment of your current portfolio must be undertaken to liquidate some older investments that carry higher risk. Investment in your forties should include:
Bonds - to reduce risk in your portfolio; and
Fixed Deposits - to preserve and consolidate the wealth you have accumulated.
Guaranteed1 Returns Insurance Plans - to enjoy the guarantee1 of assured returns with life cover.
Consider increasing your contributions to guaranteed1 returns plans to ensure a handsome retirement corpus at your disposal and increase or begin investments into a regular income plan to ensure a comfortable financial state post-retirement.
By the time you arrive in your fifties, you have to begin to prepare for retirement and anticipate the cost of your lifestyle after you withdraw from the workforce. Preserving your investment must take precedence over everything, and risk must be avoided.
In the fifties, investments that provide low risk, stable and reliable returns must be preferred. Individuals must look to reduce personal debts and prioritise asset conservation. Once in your fifties, you should consider:
Liquid assets - to have access to your money when the big expenses arrive.
Annuity Plans - to ensure a lump sum payout after retirement.
The decade of fifties is usually the last one for people to work; therefore, establishing strict safeguards to secure the wealth that you have built throughout your career is extremely necessary. Individuals should focus on preparing for a stress-free retirement with a combination of fixed income instruments and retirement benefits.
Most individuals are retired from their work-life as soon as the sixties arrive, and the constant flow of income is abruptly stopped. For people who have not invested wisely till now, it gets difficult to manage their lifestyle and fulfil familial responsibilities. For those who have followed a calculated plan, this is what you should invest in from when you are a 60 or 70-year-old and beyond:
Invest only in instruments that guarantee1 the safety of your capital.
Liquidate riskier investments.
Allocate the funds to assets you can pass on to future generations.
Explore options such as life insurance savings plans guaranteed1 income plans, annuity plans and more from Tata AIA Life Insurance. Known for excellent customer service and seamless buying/renewing processes, Tata AIA premium payment comes with high flexibility coupled with guaranteed1 returns and life coverage.
Preparing for financial freedom and accumulating wealth takes a long time, so starting early should be the preferred course of action.
Assess your own situation to make decisions on your risk appetite, financial goals and future expectations. Make sure to carefully consider your capabilities and, based on your age, decide what percentage you want to invest in moderate to high-risk investments such as stocks, ideally not more than half of your portfolio at any point. Maintain a diverse and manageable portfolio with several guaranteed1 instruments.
Prepare for every age and ensure that you are paying enough attention to your future, so when you finally retire, you can indulge yourself in every pleasure of life without any apprehensions.
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The products are underwritten by Tata AIA Life Insurance Company Ltd.
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IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER
Past performance is not indicative of future performance.
All investments made by the Company are subject to market risks. The Company does not guarantee any assured returns. The investment income and price may go down as well as up depending on several factors influencing the market.
This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.