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What Are the Investment Plans for Different Stages of Life?

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What Are the Investment Plans for Different Stages of Life?
September 21, 2022

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When we’re young, our parents continuously explain the importance of saving up for a rainy day. As young adults, we may not pay their advice any heed. However, as we grow older, we understand their wisdom and scramble to invest for our future. As you enjoy life's journey, you pass through various stages, each with its own unique challenges. The way you save and invest depends on the life stage you are enjoying at that time. Let’s look at the investment plans you can rely on in different life stages:

Early Earning Stage

When you start your career, you hardly have any financial responsibilities. You may still be staying with your parents and do not have to worry about fiscal obligations. Now is the time to start investing. You can build a good habit of saving for the future while growing your funds to help you meet future financial goals. While investing, you can take more risks now as a setback will not wreak havoc on your day-to-day functioning. At this time, choosing a Unit-Linked Insurance Plan (ULIP) can help you achieve your goals. Apart from providing life coverage, the plan allows you to pick the asset allocation. If you’d like to take a few risks, you can opt for an equity-heavy portfolio with a few debt funds to balance your risk. Additionally, you can start investing your surplus savings in a retirement fund to build up a significant corpus for your golden years.

Marriage

Once you find your soulmate, you might want to get married and create joint dreams with your spouse. You are now responsible for more than one person, so you could restructure your budget. If you did not bother with life insurance before, now’s the ideal time to purchase a term insurance policy. Remember, you should opt for a sum assured that is at least ten times your annual income. In case you have any outstanding debts, add the amount to your sum assured to safeguard your spouse’s financial future. Marriage is also a good time to start putting money away in a retirement or annuity fund. You can also consider retirement plans such as the Public Provident Fund (PPF), National Pension Scheme (NPS), and Employee Provident Fund. You can also purchase a ULIP to help you build up a corpus for your retirement.

Growing Your Family

Welcoming a child could be one of the greatest joys of your life. Growing your family also increases your financial responsibility. As a parent, you want to do whatever you can to ensure your child never wants for anything. With prudent financial planning, you can make all their dreams come true. You can safeguard your child’s financial future with a Children’s Plan. The plan allows you to grow a corpus for your child’s future. They provide payouts at key moments, such as your child’s graduation. On maturity, your child can use the money to finance their higher education abroad, pay for their marriage, or start their own company. Child plans also provide you with life coverage and most come with a waiver of the premium option, ensuring your child’s future remains intact.

Retirement

After working for several years, you are finally ready to hang up your work boots and enjoy retired life. Without a regular income, you might feel forced to cut down on your spending. If you made smart investments through the other stages of life, you can sit back and rely on the corpus you’ve built through the years. While planning for retirement, you should never put all your eggs in one basket. Instead, get yourself a retirement or annuity plan and put away some savings in long-term investment plans like ULIPs. Having a contingency plan for your retired life enables you to deal with sudden emergency expenses without worrying about burning through your money faster than expected.

Through every stage of life, you also need to plan for various long-term and short-term goals. You may want to invest and build up money to purchase a home or fund a holiday abroad. You can use investment tools like Unit-Linked Insurance Plans to help you fulfil these needs. Ensure you select an investment asset allocation based on your risk appetite and goals to avoid disappointment. When you plan your finances, you safeguard your future and your family’s financial future.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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