Investing in your 50s, 60s

‘BUMPER’ PERSONAL FINANCE EDITION

Traditional strategy is to move assets into a low-risk environment.

Do not accumulate more debt or loan money to anyone from your retirement savings. Your investment strategy and portfolio will require a somewhat different approach depending on your age and life stage. This week we look at your 50s and 60s, and beyond.

In your 50s

Your portfolio should be well established at this stage. You should be comfortable with your lifestyle level you’ve achieved; it’s time to conserve and maintain wealth.

The traditional strategy is to move assets into a low-risk environment with less equity exposure.

However, you may live well into your 90s. Ensure that you’ve planned for this, and that your assets will be able to tolerate a low-growth environment in this phase.

Inevitably, once you reach retirement you land up placing your assets back into an equity-based portfolio to ensure longevity.

Good financial advice at this stage is thus critical.

You may also have seen friends and family lose everything through poor financial decisions and “get rich quick” scams. This will mould your approach to this phase of financial planning.

Here are a few financial planning tips for this life stage: Do not incur more debt. Ensure you have a great financial advisor who is on board with your retirement plan.

Stay in shape and look after your health – this will be your biggest investment. People are living longer and living sick.

Don’t access your retirement savings early for lifestyle debt and unnecessary luxuries.

Stop funding your children. By now they should be on their own two feet.

If you, however, started a family late in life, make provision for this. Ensure your budget and planning incorporates these expenses, preferably not at your retirement’s “expense”.

In your 60s and up

These should be your golden years. We tend to approach this as an event and, in reality, this may be a traumatic experience for many. You don’t have the routine of going to work any more.

If you’ve saved sufficiently for retirement, you’ll have less stress and burdens compared with those who haven’t.

Having watched my parents go through this period, I’ve learnt some valuable insights:

Create structures that drive routine. This will provide meaning again, like collecting grandchildren from school, etc. This will also minimise money wastage as you won’t be seeking pleasure and gratification from non-essential or unplanned activities.

You should have no or very little debt. Do not accumulate more.

Plan your budget and stick to it like never before – ensure money for fun is included but prioritisation is key. Ensure your medical aid is in place and premiums are up-to-date – you may now rely on this product the most.

Don’t loan to anyone from your retirement money.

Regularly take stock of your investments and stick to the game plan – don’t fall prey to “investment short-termism”, as this can affect your whole retirement strategy.

Claire van Wyk is a Discovery certified financial advisor