• Financial planning and investing should change as you enter and exit the different stages in your life. If you are in your 50s, chances are that the financial goals you had set for yourself a few years ago may very well be different than the ones you have established at this point in life.
  • And just as your goals change by time, so should your financial advisor’s advice and guidance.
  • As a young adult in your 20s and 30s, you may require guidance and support on the financial planning basics, while setting up financial goals may be too far off your mind. But now is the time to build a financial foundation.
  • Educate yourself about managing your spending and saving within the constraints of your income levels and explore investing, since time is on your side and you can make the most of higher risk investments.
  • Your 40s and 50s is a time when your income is rising, but a you grow and have more responsibilities, your expenses may easily consume your increasing income.
  • The financial choices you make during these two decades will have a direct effect on the later years of your life. Invest wisely, ensure that your assets and wealth is protected and make sure you have established a retirement plan.
  • In your 60s, you are either nearing retirement or already retired. One of the biggest financial issues now is outliving your wealth. You need to make sure that you have sufficient funds to see you both through each month and throughout your retirement.
  • Financial planning is one part of the equation when it comes to your finances. The other, is investing and as such, your financial advisor should recommend changes to both your financial planning and investing approach.
  • In your 20s, you should invest in suitable products, while your advisor should urge you to begin investing right away so that you can benefit from the power of compounding.
  • In your 40s and 50s, you should make informed financial decisions so that you can maximise your investment returns based on your risk appetite, while you should review and rebalance your portfolio.
  • In your later years of life, your advisor should recommend that you shift your investments to less risky ones and to review your wealth accumulation should you wish to set aside funds for the next generation.
  • Deciding whether to get a financial advisor or manage your own investments is a big decision. However, an advisor is crucial if you are new to investing, lack the time and knowledge to keep tabs with the markets or your current investments are not increasing your net worth.
  • Offering bespoke advice and a choice of financial products, Calamatta Cuschieri’s financial advisors can work hand-in-hand with you so that you can make the right investment decisions. Get in touch with us today.

Our finances are in a constant state of change. Not only do financial markets fluctuate, but our financial needs also change over time, while growing your wealth and security is a life-long commitment. Generally speaking, most people pass through three primary life stages as they age and while income levels, spending patterns and family situations may be unpredictable, they do tend to follow a pattern and it is these events that will dictate what priorities you need to focus on and the financial decisions you need to ultimately make.

With the ability, knowledge and expertise to understand your financial goals, objectives and dreams, a financial advisor can stir you to the right financial path at any stage of your life as they take anticipatory steps to prepare you for the next phase long before you get there. And as your objectives change, the role your financial advisor plays must also alter.

With all the above in mind, here are some tips on what to expect from your financial advisor at different life stages.

Why does age matter when managing your money?

If you are in your 50s, chances are that the financial goals you had set for yourself 20, 10 or even five years ago may very well be different than the ones you have established at this point in life. Similarly, someone who is one step close to retirement, may have altered their priorities and the manner in which they handle money to that when they were younger. For instance, an individual in their late 20s may not have much capital, however, they can afford to invest the little they have more aggressively compared to a retiree who might be more focused on reallocating their risky investments into dividend-paying stocks that could provide them with passive income during their retirement. This is why financial planning and investing should change as you enter and exit the different stages in your life. And this is where a financial advisor comes in. Armed with the necessary experience and knowledge, they can help you prioritise you needs and help you achieve your financial goals no matter your age.

Here is a breakdown of the typical life stages individuals go through and what to expect financially and otherwise in each one.

 Stage one: 20s & 30s Enter the workforce 
Get married 
Have children 
 Establish financial habits  
Purchase first property 
 Stage two: 40s & 50s Career advancement  
Receive an inheritance  
Wealth accumulation 
Funding important goals like your child’s education 
 Stage three: 60s & beyond Enter retirement  
Have grandchildren  
Death of a spouse  
Preserving wealth 
Estate planning  
Passing down legacy 

Financial life planning stages

Financial planning in your 20s and 30s: Building a financial foundation

As a young adult, probably fresh out of university and just having set foot on the career ladder, you may be lacking the financial basics, while setting up financial goals may be too far off your mind. However, building a financial foundation at this stage in your life is crucial. At the beginning of your career, you might not have much cash flow, but that could just as well change as you progress through life. So view these two decades as so-called learning phases, where you can educate yourself about managing your spending and saving within the constraints of your income levels. This is also a good time to explore investing, since with time on your side, you can make the most of higher risk investments and you can set yourself up for financial success.

Here is how your financial advisor can help you when it comes to financial planning in your 20s and 30s:

  • Track your spending habits to identify ways to save and to set a budget.
  • Set aside three to six months of expenses as emergency reserves, which can protect you against unexpected events, such as loss of employment or a large home repair.
  • Set both short-term and long term-financial goals. Whether for a long-awaited holiday or a down payment on a home, having a tangible goal in mind can really motivate you to make your money work for you.
  • Determine a saving pattern, such as an automatic savings plan that can change and develop as you progress in your career.
  • Establish ways to manage any debt you may have and come up with the right strategy for getting out of it.
  • Make sure you have adequate insurance coverage to protect yourself and your family.

Financial planning in your 40s and 50s: Achieving your peak earning years

A time when your income is rising, your 40s and 50s may come with several responsibilities and potentially more expenses. As you grow, your family and finances during this so-called earning phase may also begin to increase. Moving into a bigger and nicer home, replacing your car with a new and improved version or paying for your dependents’ education can all consume your increasing income. While you should enjoy life, you must remember that the choices you make during these two decades will have a direct effect on the subsequent decades and can condition how you end up living in your 60s and beyond, so avoid adopting a work hard, play hard mindset. As your income increases, so too should your savings and investing activities.

Below are some key areas you should discuss with your financial advisor:

  • Invest wisely by keeping in mind your goals, both short-term and long-term, as well as your risk tolerance. Consider an asset allocation strategy that matches your time horizon and risk tolerance. Have a look at how you should go about selecting the right investment strategy.
  • By now you should have developed a reasonable budget and should be disciplined enough to stick with it. More than anything, living within your means and saving will condition your financial standing in the long-term.
  • Ensure that your assets and wealth is protected appropriately.
  • Work towards paying down debt, such as your mortgage, while increase your savings by that same amount. In that manner, you will have enough funds to carry on investing.
  • Establish a retirement plan if you have not done so and if you have, see whether you need to make adjustments to it. Have a look at how you should go about planning for retirement in your 40s.

Financial planning in your 60s and beyond: Reaching retirement

By this stage of your life, you are either nearing retirement or already retired – either way, you are readying yourself to slowing down. You may not be working anymore or you may be working part-time, your children would have left the nest and you have more free time in your hands to enjoy yourself and relax. Having said that, one of the biggest financial issues now is outliving your wealth. You need to make sure that not only you have sufficient funds to see you through each month, but that your wealth is enough to see you throughout your retirement. This is why this stage is known as the so-called return phase or cash flow phase.

What’s more, there are still a number of financial issues that your financial advisor should be able to pinpoint and help you address:

  • Continue investing wisely and managing your assets in such a way that you are still generating sufficient cash flow to live.
  • Reduce your exposure to risk and find ways to preserve your capital. Review your financial plan and consider a more conservative risk level for new investments, since now you no longer have the luxury of time.
  • Review your estate plan and make sure it is up to date. Any changes to your financial situation or your family should serve as triggers for reviewing this.
  • Plan how you can leave a legacy for your family, with strategies in place to help reduce any taxes they may incur.

Want to find out more about financial planning? Discover how you can create an effective financial plan.

Financial advice at different life stages

Financial planning is one part of the equation when it comes to your finances. The other, is investing. And just as you would expect your advisor to recommend changes to your financial planning, the same applies to when it comes to investing. Below are some pointers on the type of financial advice you should expect from your advisor at the aforementioned stages in your life.

Financial advice in your 20s and 30s

Invest in suitable products:

Once you have set aside part of your salary to create an emergency fund and to pay things like your insurance premiums, you should create a plan to start investing some of your savings on a regular basis. Remember time is on your side, so the earlier you begin investing, the more you can benefit from the power of compounding.

Financial advice in your 40s and 50s

Make informed financial decisions:

Once you have laid strong financial foundations and settled on a stable budget, it is time to capitalise on your peaking earning power, most especially if you can set more funds aside for investing. In fact, your advisor should help you maximise your investment returns based on your risk appetite.

Review and rebalance:

It is important that you regularly review the progress of your financial planning together with your financial advisor. This will help you to determine whether the complexities of the market are working in your favour and by consistently tracking your finances, you can ensure that your efforts are producing positive results.

Have a look at what rebalancing is and why it is important.

Financial advice in your 60s and beyond

Consider shifting your investments:

At this point, your investment horizon has gotten much shorter so you may want to preserve what you have saved by shifting more of your investments into less risky ones. In addition, you may also want to invest in a variety of products that can generate a regular stream of income.

Review your wealth accumulation:

If you wish to leave a legacy to the next generation, now is the time to review your wealth and take active steps to ensure that you have set aside sufficient funds for your dependants’ needs.

Do you need a financial advisor?

Looking to begin your financial journey but are stuck with no financial advisor in sight? Read through our ultimate guide to finding the right advisor and below are some things to consider before selecting a professional.

Deciding whether to get a financial advisor or managing your own investments is a big decision, however, remember that making the right financial decisions takes time, skill and effort and if you are certain that you do not possess any of the above, you will be better off with a financial advisor. You also need to bear in mind that investing is not a one-time thing, while delaying good financial decisions or prolonging poor ones could cost you.

The same applies if your finances are disorganised or you do not know how to invest. While saving can help you accumulate an amount of capital overtime, investing is one of the most effective ways to grow your money. In fact, have a look at the main differences between saving and investing.

And a financial advisor is even more imperative if you are consistently losing money. Your investments should increase your net worth, but if yours are not doing so systematically, then you have clearly made the wrong financial decisions. Ultimately, what makes a financial advisor worth it is their ability to keep you on track and identify financial risks and opportunities for you.

What type of service you want and what level of advice do you need?

A professional who provides financial advice or guidance to customers for a fee, a financial advisor can provide several services. Some offer assistance, while others provide complete management, including handling tasks like trading and investing on your behalf, rebalancing your portfolio and other such-related services. A few may also provide an even wider array of services ranging from portfolio management to insurance products and everything in between.

How to choose the right person

In most European countries and especially in Malta, financial advisors must have the right qualifications, while they typically undergo specific training. In addition, they must also be registered with a regulatory body in order to provide their services. But putting qualifications and education aside, opt for a professional who has a wide experience and has been working in the industry for a number of years.

Where to find a financial advisor?

Picking the right professional for your situation is crucial otherwise you risk ending up working with someone who is not a good fit for your needs. Here are some benefits of enlisting a Calamatta Cuschieri advisor’s help:

Bespoke advice – whether you are looking to invest, plan for your retirement or manage your assets, our advisors can offer regular advice that matches your personal financial circumstance, while they work hand-in-hand with you to establish investment decisions with your best interest in mind.

A choice of financial products – with access to a full spectrum of investment products, Calamatta Cuschieri’s advisors can invest directly in the markets, which means that you have a wide choice of assets at your disposal, while you are not restricted to any particular investment.

Peace of mind – by keeping close tabs on the markets, taking care of a wide range of challenges on your behalf and by conducting thorough research to identify the best investment opportunities, you can rest safe in the knowledge that your finances are in good hands.

Whether you are looking to accumulate your savings so that you can pay for you children’s education, buy your first property or prepare for retirement, assessing your goals and having a clear idea of both your objectives and risk tolerance is crucial. Yet, as you progress through life and move on from one life stage to the next, every phase brings varied goals and priorities that require a different investment approach and your financial advisor can serve as your guide to making the right investment choices. Get in touch with one of our financial advisors today.