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As you age, you will begin noticing that your mentality will shift continuously. Who you were in your twenties will eventually evolve into who you will be in your thirties and so on for the rest of your life. This will affect every avenue of your life, from smaller habits such as the clothing you wear to more major life decisions.

This also spills over into your investment decisions as well. If you start investing when you are younger, which is often recommended these days, why wouldn’t your investment strategies change as you get older and, at the same time, more mature?

How you approach investing as a young adult will look differently than how you will invest when you are middle-aged. Here is an overview of how your mindset towards investing should transform as you get older:

Early Twenties

For most individuals in this stage of life, this may be your first professional job. Your income may be more substantial than it has ever been, but you aren’t making what you will be later in life. This is your time to take risks because it will not be as detrimental to you if something were to happen to your finances, since you have such a lengthy period of time to invest smartly – and with more money as you gain experience within your profession. This is also the time when you should start considering investing in your retirement, even if it is smaller amounts.

Early Thirties

By this point, you should have already started making more in a new role at work or at another place of employment. While you may have access to more money, it does not necessarily mean that you have more to place in investments quite yet. At this stage in life, you are most likely not only supporting yourself, but a growing family as well. You should still be investing into your retirement, but you should also begin dialing back on taking investment risks and, instead, start diversifying your portfolio. At this stage of life, you should also start thinking more about life insurance as well.

Early Forties

Your investments are starting to become more stable. Your children are growing up, requiring less support from you. You are now bringing in even more of an income from your job. This is the perfect time to start dedicating more money to your investments.

Early Fifties

You have been building up your finances by this point in your long-term investments, so now it’s time to really assess risk, cost, fees and return. You are now at an age where you cannot afford to lose any of your assets as you do not have time to rebuild your asset base. Traditionally, that would mean it’s time to start putting effort into more short-term investments that are of low-risk for you. However, by mimicking some of the strategies that are used in Northern Europe and by executives here in the U.S., you can still participate in the upside part of the market. Thinking outside the box and having the focus on risk will help you prepare for retirement.

Retirement Age

Now that you are at retirement age, it is time to align your asset in two ways: part should go into producing income that you cannot outlive to address the longevity risk and the other part should go into liquid assets you can access in case you need to. This will help you in terms of creating more income, giving you peace of mind that your core expenses should be covered.

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