Question

How does retirement planning change as you get older?

Answer 1

Broadly, there are two phases in anyone's financial planning: Wealth accumulation and wealth distribution.

As you get older, you should focus more on protecting the wealth accumulated and plan for distribution. Most of your wealth should be in debt funds, which are relatively safer than equity.

This is because as you get older your risk-taking ability goes down and you should rebalance your asset classes. When you were young you had the ability to take the risk and the majority of your financial assets should be in equity, which has the potential for higher return. As you get older, your income generating ability also goes down and you should plan accordingly to buy an annuity to cover for the expenses.

Can you please upvote? Thank You :-)