We usually associate investing with our working years, the time when we earn an income, save, and slowly build our wealth.
This ‘accumulation phase‘ then seems to be followed by a second phase, retirement, during which—having reached a certain level of financial security—investments are reduced and the main focus shifts to protecting the accumulated wealth.
However, this approach fails to account for a major demographic shift: we are living longer, in better health, and with very different needs and plans compared to previous generations.
For this reason, even after retirement there can still be room for investments: if life is getting longer, the assets must also be rethought to preserve their value over the time they will have to support us.
“At my age it’s too late to invest”
Therefore, there is no point in life when assets stop requiring attention and planning. As the years go by, however, needs, priorities, and goals can change, and consequently, so can the way assets must be managed.
For some, maintaining greater liquidity may become a priority; for others, preserving the purchasing power of their savings. Still others will aim to financially support children and grandchildren, while others will face heavy expenses or plan the transfer of their wealth to future generations.
As we can see, the challenges related to wealth management can be numerous and complex, even in golden age / later life, and completely abandoning one’s investments and leaving assets idle is never the safest choice, even if it seems the most prudent.
“Longevity: a new challenge for wealth”
One of the main financial challenges associated with longevity is the risk of outliving one’s wealth.
Retirement is not necessarily ‘an end point’, but the beginning of a new chapter in life. A person retiring around the age of 65 may still have 20, 25, or even 30 years of life ahead of them, to be lived to the full by continuing to travel, cultivating their passions, devoting themselves to family, realizing pending projects, or simply freely choosing how to spend their time.”
If retirement years span decades, then the accumulated resources must be sufficient not only to support today’s needs, but also those of a future that could be much longer than one might imagine.
From this perspective, the idea that at age 65 one might consider investments with a 20- or 25-year horizon should not come as a surprise: in this way, capital continues to grow and preserve its purchasing power over time.
“Financial advisory in later life”
Wealth management in later life must be based on building a precise balance between today’s needs and those of the years to come.
In such a delicate phase, the support of a financial advisor is essential to build a strategy that takes into account the time horizon, the sustainable risk level, and the goals one wishes to achieve through one’s wealth.
This is the perspective with which we at Team Paperetti approach financial advisory: starting from people, rather than the product, to understand their needs, priorities, and goals, and to build, together, a strategy capable of supporting their wealth over time.
Want to learn more? Contact us today to build a strategy together that aligns with your goals!