The Three Phases of Financial Life and Planning for Retirement

Every person goes through three main phases in their financial journey. The first phase, known as the dependant phase, occurs at the beginning and end of one's life. During this phase, individuals are minors and then may transition to a stage where they must learn to fend for themselves.

The second phase, termed the accumulation phase, involves working hard to gather wealth. The third phase is the decumulation phase, where individuals are typically not actively employed and rely on the wealth amassed during the accumulation phase. Proper preparation for the future, especially retirement, is crucial for mental, physical health, and overall quality of life.

A holistic investment approach is vital for retirement planning. A well-rounded financial plan should include short-term, medium-term, and long-term goals tailored to different life stages. For example, a 25-year-old's financial goals would differ from those of a 45-year-old, with retirement being a more imminent consideration for the latter.