Investment hurdles older investors face

As we age, changes in all aspects of our lives can’t be avoided. Physical and mental wellbeing should be taken more seriously if you want to have the best possible quality of life; this includes your financial wellbeing, too. It’s important to assess your financial situation from a relative perspective.  

Attitude to risk changes as you become older

‘Start saving and investing as soon as you can’ is a phrase you may have heard numerous times throughout your 20s and 30s. The reason that it’s worth taking action to start saving at that age is that you have time on your side. You can take risks knowing that if they don’t turn out as you had hoped, you typically have time to start again. It’s worth speaking to an independent financial adviser (IFA) who can assist you in getting back on track. 

As time passes by, it can become increasingly difficult for older investors, e.g. those who are either approaching – or have passed – the age of retirement to recover from financial losses. Even though you may have additional retirement savings products in place such as a retirement annuity (RA), your savings may not be sufficient. Therefore, it’s recommended that when it comes to risk, older investors should implement a more conservative attitude with financial decision-making to preserve finances.

Ease of access to information changes

One of the primary issues that many retirees (even financially savvy businessmen) may face is that once retired; they no longer have access to the in-depth level of information they had when they were working. A lack of knowledge could impact their investment portfolios significantly. Yes, they may still have access to the internet, but the plethora of unregulated, unverified information and data can make investing more complicated. 

It’s at this point that financial advice, provided by someone you can trust (such as an independent financial adviser), becomes a valuable asset. It doesn’t mean that every piece of guidance should always be followed to the letter, but the adviser’s insight may trigger novel decisions that can lead to successful investment.  

Our priorities shift

It can be argued that it’s safe to say that priorities change over time. Thinking about assessing and nominating beneficiaries of inheritance could be around the corner. This can be a complicated undertaking with much thought required. For many people, the financial stability of their loved ones is likely to become a significant priority. 

Perhaps, the most substantial change in older investors’ attitudes is that they are more than likely going to rely on their current finances; unlike younger investors, they cannot hope that a cash windfall may come their way. Furthermore, they are caught in a conundrum where their future expenditures are increasing due to greater longevity, but investment returns may be declining. Investment success can hinge on innovative, contrarian thinking, which can become increasingly challenging. Therefore, speaking to a financial advisory professional such as an IFA can be pivotal to taking care of your financial wellbeing.   

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