In the United States, the average retirement age is about 65 years while the average life expectancy is about 80 years. These numbers show that after you retire, you will have about 10 more years to live. This age is usually associated with a number of issues like diseases and lack of enough income. Therefore, the earlier you start saving and investing, the better it will be for you and your future life. This article will highlight just some of the ways you can start doing this.

Teenage years

In your teenage years, the best thing that you can do is to invest in a good education. If you do well at school or university it will help you open the necessary doors for your future career and earning prospects. It’s not easy to see what the future will bring and deciding which life course to follow at this age is an investment of its own. While it may seem prudent to study for professions that are focused on providing you with a stable income in the future, that is a difficult thing to predict. An Arts Degree cannot be overlooked for this reason as it teaches you to be creative, flexible and adaptable – perhaps the most useful life skills you will need in whatever career path or paths you follow.

Creativity, flexibility and adaptivity - the most useful life skills you'll need in whatever career path you choose to follow.

If you have a passion for the markets, you should spend your free time learning about how they work. Don’t think you are too young to learn about and practice in the financial markets. While most investment vehicles won’t be open to you until you are 18 years of age, and you may not have much of a disposable income, you are never too young to start learning. For example, Warren Buffet bought his first stock when he was 11 years. Ken Griffin, who is now worth more than $12 billion started his firm, Citadel Investments, at 18 years. The same is true among many successful investors like David Einhorn, Ken Fisher, and Bill Gross.

A good way to start is to spend a lot of time reading books, watching videos about the market, and practising with a free demo account from a reputable CFD or stocks broker. The dedicated blogs like this one will keep you up-to-date to what's going on on the market.

The value of starting to do these things early is that at your age, you are allowed to fail and you have a lot of time to recover your loses.

Your 20s

In your 20s, chances are that you have completed your tertiary studies and you have a rough idea about what you want to do in life. Potentially, you have even landed a job.

This may be the most important age bracket in your life as the decisions you make now will be very defining in your life. For example, if you decide to start a business instead of being an employed professional, it will likely define your future life. Still, like in your teenage years, in your 20s, you are allowed to make mistakes. For example, if you decide to start a business and it fails, you can always apply and get a new job.

At this age, you should get involved in two main types of investments. First, you should start investing for retirement. You can do this by investing a certain percentage of your monthly income to your retirement account. For example, if you earn $5000 a month, you can decide to invest 10% of it in retirement. If you start at 25 years of age, you will have more than $240,000 when you retire at 65. When you add interest, you will have more than $350,000.

This is the opposite of a person who decides to start saving for retirement when they are at 35. If they do like you, they will have $180,000 at retirement.

Retirement accounts are not known to offer a lot of yields because they are often low risks. At your age, you have the freedom to become a trader as well. This is where you open a trading account, fund it with some money and start trading. These days, online CFD and ECN trading companies accept accounts with as little as $500. The goal of this account will be growth. However, if you haven’t already done so as a teenager, it is recommended that you learn and practice trading before you start.

At this age bracket also, it is recommended that you start investing in housing. This might be for your own use or to use as a rental property. You have plenty of years ahead of you to get a mortgage with low monthly instalments. Of course, the challenge is to have the initial capital to begin with.

In your 30s

Your 30s is the age bracket for you to accelerate growth in your finances. You should continue contributing in your retirement account. If you haven’t started saving for retirement, you should start as soon as possible. No matter how small the amounts are that you put aside, make them regular.

By now, you might also have children so your disposable income may have reduced. You will not only have greater expenses but you should consider investing on their behalf to meet their future educational needs.

At this age, you can start diversifying your investments. A common way to do this is to invest in real estate. Real estate is referred to as a safe bet because it will always give you cash flow even in your retirement. If you can’t afford to invest in real estate, you can use online platforms that pool resources from investors and invest in real estate programs.

In your 40s

They say life begins at 40 but hopefully, your investing has started much before this. Your extra income should be used to grow your previous investments – up your retirement fund, increase the savings for your children’s educational future and look to diversify your investments as you are near your retirement age.

Some of the investments you can make are:

  • Stocks: with your cash flow or extra income, you should consider investing in stocks. Historically, stocks have been the best-yielding asset class. Here, you should invest in growth, income, and value stocks.

  • Bonds: to supplement your retirement account, you should consider investing in bonds. The yields of bonds are usually not high but they are known for their safety.

  • Real estate: if you did not start investing in real estate in your 30s, you can also start doing so at this age.

  • ETFs, indices, and mutual funds: You can also invest in these financial securities which invest in a diverse group of financial securities.

If you have never traded and you have the time to learn it, this is also a good time to do it. If you are unable to do the trading yourself, financial products like Copytrading enable you to copy trades from experienced professionals.

In your 50s

In this age bracket, chances are that your children are nearing their studies. You too are nearing retirement. The goal in this age is to continue what you started in your younger years. Continue trading, continue investing in stocks, bonds and real estate.

If you have extra income, it is recommended that you continue to diversify your sources of income. A good way to do this is to invest in other private companies. This is a situation where you invest a minority stake in small companies with the hopes of generating a good return in the future. For example, Peter Thiel was among the first investors in Facebook. At the time, the company was valued at less than $5 million. This investment – and others – have made him a billionaire. You too can do this, even on a small scale. A good way to start is to use the online crowdfunding platforms.

In your 60s and above

This is the age bracket where you retire. If you started planning for this stage early enough as recommended above, you will hopefully not have too many financial difficulties. Your children will be well-educated, you will have your home, good health insurance and good cash flow. Your focus here is wealth retention through low-risk financial products and looking into family trusts for you to pass your wealth onto your next generation.

Need to start now

If you haven’t participated actively in the financial markets so far then you are missing out. Missing out on having a better quality of life now and in the future. It is never too late to get started, whatever you do now, can only benefit you in the years to come.