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Life stages and their financial effects
Life events and stages can have a significant financial effect. For example, employment, having children, retiring, redundancy, education, marriage and divorce all have a financial effect. At each stage of life you are likely to have different needs, priorities and objectives. Professional advice can help achieve your goals effectively.

The key stages in an individual's adult life can be broadly categorised into:

  1. Laying your financial foundations - Typical Age Bracket: mid-20's to late-30's
  2. Building your lifestyle & future  - Typical Age Bracket: mid-30's to mid-50's
  3. Funding your retirement lifestyle - Typical Age Bracket: early 50's and over
  4. In addition, people need to be always prepared for the unplanned events that could impact their financial well-being
Read more about these stages below to understand how financial advice can help you achieve your goals.

1. Laying your Financial Foundations
If you think about the things you set out to achieve in life, the things you are now doing, and those that lie ahead; then now is the time to lay the foundation for the next stage of their life. Most people tend to think that while costs like lifestyle expenses, cars, possible home purchase and personal loan repayments are straining their finances, they can't afford to build wealth for the future.

It's easy to leave future planning for later - more often than not, it's not as effective as doing it now. It's never too early to start the planning process.

Concepts and Strategies to Consider:
  • Managing debt levels on credit cards and personal loans
  • Investment principles of compounding and dollar cost averaging
  • Understanding superannuation
  • Possible additional superannuation contributions (i.e. co-contributions, spouse contributions)
  • Savings plans and regular investing
  • Managing risk (i.e. general and personal insurance)
2. Building your lifestyle & future
If you think for a moment about the way you would like to live, the things you would like to do - perhaps spend weekends at a holiday house or hobby farm, sailing, travelling or simply having the home you always dreamed of.

Whatever your goals or dreams may be, there is usually a number of financial alternatives to assist in achieving them. Don't let life pass you by. This is an ideal time to explore and implement wealth creation strategies.

Concepts and Strategies to Consider:
  • Mortgage reduction
  • Education funding
  • Superannuation including salary sacrifice, co-contribution, spouse super
  • Gearing and borrowing to invest
  • Savings plans
  • Tax planning
  • Managing risk (i.e.: general and personal insurance)
  • Start retirement planning
3. Funding your retirement lifestyle
You may be looking forward to a more relaxed lifestyle - never having to get up for work again; having the time to do the things they have put off for years; travel; seeing more of friends and family. Retirement is a time when people should be able to relax and enjoy the rewards of their working life.

If you are thinking about retirement, whether complete or partial, one of the most important things to consider is how you are going to fund your retirement lifestyle.

Concepts and Strategies to Consider:
  • Eliminate non-tax deductible debt
  • Maximise superannuation levels
  • Consider structure of superannuation assets
  • Increase investments outside of superannuation
  • Gain understanding of Centrelink
  • Income streams - non-super including interest, dividends, along with superannuation such as employer pensions, complying incomes, allocated pensions, term allocated pensions, etc
  • Estate planning
4. The unforseen
No one wants to imagine that fraction in time when they know they are going to have a car accident; the look on their face when the doctor tells them that they won't be going back to work for a while; the phone call that they thought they would never receive. While we would all like to think that unplanned and unwanted events will never happen to us, the reality is that they do. Every year thousands of Australian families are affected by unplanned events which can have substantial impact on their financial well-being.

What would move someone's financial goal posts?

There is a wide range of events which can change someone's financial situation, usually through lowering the earning capacity or asset base of the family unit, or possibly from a positive windfall.

These include:
  • Relationship breakdown
  • Unexpected retirement
  • Irregular or loss of employment
  • Illness
  • Accident
  • Business failure
  • Loss of asset - eg: a building fire, car accident, burglary
  • Death of a partner
  • Inheritance
The possibility of an unforseen event occurring cannot generally be planned for. However, you can manage the risk of such an event having a significant negative impact on their financial position by regularly reviewing their level of assets and insurance, both general and personal coverage to make sure they are comfortable with the financial protections they have in place. 

Prosperum Wealth, with their suite of products and services would be able to assist you minimise the financial impact of an unforseen event.

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