How should your financial plan change as you get older?
Our finances and needs change over time. This is why reviewing your financial plan at least once a year is recommended by experts as a general rule of thumb.
Economic and market conditions can also affect your investment and retirement plans in the short term, says Mr Lim. “Monitoring these factors ensures that you are taking advantage of new opportunities and protecting against potential risks.
“As always, consider risks before returns so that you do not take on more risk than you are able or willing to.”
Mr Lim shares the following tips and potential key events in each stage of life.
If you’re a young working adult
Focus on building a solid financial foundation. This is the time to pay off your student loan, carefully manage your budget and save for emergencies.
An early start to financial planning can help you build wealth to support your life goals and aspirations. These could include big events like buying your first home, which needs a down payment and monthly mortgage, or getting married and having kids, which might mean getting extra life insurance.
While retirement may seem far off, it’s wise to start financial planning early to compound your retirement nest egg over a longer period.
If you’re a mid-career employee supporting a family
This phase often involves increasing savings or investing towards retirement, planning for your children’s education, and paying off housing loans.
A major life event, like having children or dealing with medical expenses incurred by elderly parents, may require adjustments to your financial plan.
If you’re approaching retirement
Your priorities should now shift towards preserving your wealth and generating retirement income.
Financial plans typically focus on earning income through investments, monetising property and preparing for healthcare costs as
