In the grand scheme of things, the volatility of 2022 will be a small blip on the charts. But it has served as a reminder the importance of investing fundamentals and long-term thinking.


While everyone’s journey is different, age should be one of the defining factors in your investment strategy. It plays a large role in determining how much you earn, your expenses and risk capacity, and most importantly – how much time you have.

With this in mind, Morningstar Investment Management has released a series of key ideas for investors in their 20s through to their 70s.

Jump ahead to see tips for:

Morningstar Investment Management’s global chief investment officer Dan Kemp says with more volatility expected in 2023, investors should look beyond the headlines and focus on their objectives.

“We are aware that in such a volatile environment, each generation has particular concerns,” Kemp says.

Here are Morningstar’s top tips investors of all ages can take, to help them succeed financially

Investing in your 20s

The three key questions investors in their 20s face:

  1. Is now a good time to get started with investing, given all the noise and uncertainty?
  2. Should I be building my assets in stocks, property, high-risk assets like crypto, or my own education?
  3. How much should I invest for it to be worth it?
Zoomers on computers

If you’ve just started out in the investment world – or are in the process of considering it – don’t let the volatility of 2022 scare you off.

Time is one of the most powerful variables in investing, and has a huge influence in your ability to reach your goals.

“It is no secret that compound interest is extremely powerful,” says Morningstar Australasia's director of manager research Annika Bradley.

“If you’re 20 and starting out—hear this—time is on your side and get started today," she says.

“If you compound $10,000 over 10 years at 9% per year—it turns into just under $24,000. But give yourself 50 years—it amounts to over $740,000.”

Start with the 'why' of investing

Goals-based planning offers an effective and motivating solution for investors – but simply plucking goals out of thin air isn’t necessarily helpful. That’s where a master list can help.

An example of a financial goals master list:

master list

In fact, research shows that 71% of people change one of their top 3 goals by doing a simple review comparing to a master sheet of common goals.

Reframe budgeting

Young people can struggle to budget as psychological “wants” are perceived as needs. Understand the root of those needs and find ways to address or prioritise them.

This Golden Ratio can help you find the right balance between spending and saving.

Consider value drivers

Could you benefit from broader financial planning? All too often, you think about investing first, but the foundations are just as important.

Start small, escalate regularly

Many investors struggle to get started with investing, but it’s important to start soon as you can.

You don’t need a lot of money to begin investing. By making small, regular contributions over time, you might be surprised by how quickly your investments accumulate.

Starting small and increasing regularly can be an effective method to increase wealth.

Prepare for a crash

Over the investing lifetime, investors are likely to experience 5+ market crashes.

The response to these events will determine their ability to reach their goals. The better they are prepared, the less likely they are to make mistakes.

Learn more about the basics of investing here.

Investing in your 30s

Four key questions for investors in their 30s may be:

  1. Should I repay debt, save cash, or invest? What will help most if interest rate rise further?
  2. Is investing for retirement worth it?
  3. Should I avoid locking my savings away in case I need it?
  4. Should I align my savings with my values, or keep separate?

Those in their 30s have a lot on their plate – especially when it comes to getting ahead financially. They face a complex balancing act between making major expenditures in the present – buying property, raising a family – and weighing how much to save.

But it’s important to keep retirement on the dashboard, even if it is many years in the future.

According to a study by the Center for Retirement Research at Boston College, people who began saving in their mid-30s only needed to save 15% of their yearly income to retire by age 65. Those who began to save in their mid-40s needed to save 27%.

Here are some tips for those in their 30s.

Deal with competing goals

People with competing goals often feel more comfortable where the savings to support these goals are compartmentalised. Having different pots can shift the effectiveness of investing.

Morningstar’s goal planning worksheet can help you quantify your various financial goals, over the short term, the long term, and in between.

Reconfigure the "why" of investing

Goals remain a north star - revisit your investing goals with the help of a master list.

Research shows one in four people change their top goal after seeing the master list, while 73% substituted at least one of their top three goals with goals from the master list.

Consider value drivers

All too often, people think about investing first, but the foundations are just as important. That’s where broader financial planning can help.

Our guide on financial planning can help you unlock the value of financial advice - whether you choose to use an adviser or not.

Focus on passive cashflow generation

When thinking about saving, consider future retirement outcomes in annual income in real terms.

How much will you need to retire? It is easier to think of $60,000 per year, than to think of a savings pot of $5 million, as the latter can be overwhelming.

Here we walk through the process of calculating the amount of money needed to support your retirement.

Help align values with investments

If you want to include your values in your investing, start by understanding what those values might be.

Many investors in their 30s may want to consider values-based investments, perhaps with a multi-asset ESG portfolio. Start by understanding your preferences.

Reinforce the habit of regular investment

People in their 30s can supercharge their net wealth by topping up holdings on a gradual basis. An idea in your 30s is to save more during each pay rise, to avoid lifestyle creep.

Investing in your 40s

Investors in their 40s face several challenges, and may be asking:

  1. How much do I need to invest from here through to retirement?
  2. What is the right asset mix for my phase of life?
  3. What should I do to protect against loss, such as losing my job in a recession?

Those in their 40s face multiple competing priorities – increased income, yes, but also higher costs due to growing families, in some cases caring for elders alongside children, and also one’s own retirement.

At this stage, it’s time to ensure that you have the right savings habits and are invested at the appropriate risk levels in order to meet your goals.

“For some, taking retirement planning seriously might still be a bit of a challenge. In your 20s and 30s the concept of retirement is somewhat nebulous but in your 40s it starts to feel a bit more real,” says Christine Benz, Morningstar’s Director of Personal Finance.

“At that point your parents are probably either approaching or in their eighties so you would have seen first-hand how their retirement played out.

“If you’re planning to work until age 65 you still have enough time to effect positive change, but you can no longer afford to ignore it altogether,” she adds.

Here are some tips:

Visualise Your Future

Investors in their 40s can feel absorbed by the present and disconnected from their future. It helps to imagine your life a decade into the future. Then, estimate the cost of the life you want.

Morningstar behavioral economist Sarah Newcomb calls this your mental time horizon.

“In our study we found that in every income group, people who think at least 10 years ahead had saved significantly more than peers who had a shorter mental time horizon,” Newcomb says.

Behavioural coaching

Research shows that behavioural coaching can add meaningful value. Or conversely, bad behaviour is destructive. To avoid bad outcomes, focus more on the principles of good investing and associated habits.

Consider different portfolio combinations

Meeting goals is an individual experience and tracking the S&P/ASX200, or S&P500 is not for everyone. Embrace portfolio combinations you fell positive about, but don’t overcomplicate your investments.

Make sure you’re taking enough risk

Investors in their 40s typically have a large capacity for loss but may have a more modest risk tolerance. Aligning your risk tolerance, capacity and goals are key in this decade.

Investing in your 50s

The biggest questions facing investors in their 50s are:

  1. Given the market moves, will I have enough capital to reach my goals? Are my goals realistic?
  2. How do I make the most of my savings?
  3. What are my smartest investment options?
  4. What impact would a market crash have before retirement?

Investors in their 50s are getting ready to retire, and can already picture their ideal retirement, but still have some work to do before they get there.

In their 50s, investors need to navigate complex financial needs and life commitments, and that means repositioning portfolios for optimal return and risk levels.

Address the impact of taxes

As investors in their 50s accumulate savings outside their tax-advantaged superannuation accounts, taxable gains become more important. Any way that retirees can exercise a level of control over the tax management of their portfolios to potentially reduce the tax drag and enlarge their take-home payouts.

Maximise saving

As your earnings near their peak and some costs subside, it is more important than ever to maximise the amount being saved. Focusing on your progress toward your goals is key.

Consider value drivers

Getting the foundations right for your transition to retirement is important. Consider whether you could benefit from broader financial planning.

Discuss investing in real terms, after inflation

After inflation, cash is often a terrible investment, eroding the purchasing power. With cost-of-living increases, could a real return strategy work?

Investing in your 60s

For anyone in, or approaching, their 60s, the prospect of retirement becomes all too real. Extended beach vacations, travel, quality time with grandkids, all of it is within reach.

People in their 60s face three key questions in 2023:

  1. How do I know if I have enough money to retire?
  2. What’s the smartest approach to generate an income from my portfolio?
  3. How do I deal with inflation, given rising expenses and falling asset prices?

Morningstar’s Christine Benz says that when it comes to investing in your 60s, look at how much you have been able to save and how much the portfolio might grow before actual retirement.

It is recommended that individuals do what’s called an investment policy statement, which considers details such as the assets available in your portfolio, the level of risk, the rate of return that you’re trying to achieve, the management of your portfolio, and the cost, among other parameters.

You can download Morningstar’s investment policy statement template here.

In all cases, appropriate asset allocation is key, Benz says.

“One thing that’s on the top of my mind right now, is the strong performance in the equity market over a decade,” says Benz, who points out that many people in their 60s, especially if they’ve been taking a hands-off approach in their portfolios, have a lot of stock exposure.

“I would say at the portfolio level, that is the key thing to take a look at, and whether you might consider adjusting that equity piece downward a little bit,” she says.

Benz is a big believer in using a “bucket” approach to visualize what would be an appropriate asset mix, and that varies according to each individual.

Here are Morningstar’s top tips for those preparing for retirement in 2023.

Focus on desired outcomes

As investors approach or enter retirement, outcomes become far more important than relative gains.

Tie outcomes to their goals, with a specific focus on funding your retirement cash flow needs.

Reframe budgeting

Retirees often struggle with their budgeting as their ongoing needs change. Understand the retirement smile (spending starts high, then falls, then increases again) and how to address it.

Focus on value drivers

The 60s is a prime period for broader financial planning. All too often, we think about investing first, but the structures are important, including final contributions.

Avoid short-sightedness

Investors in retirement can become too defensive and short-term orientated. A portfolio ‘bucketing’ approach combining portfolios with different risk profiles can you stay focused on the long term.

Behavioural coaching on sequencing risk

Research shows that behavioural coaching can add meaningful value. Or conversely, bad behaviour is destructive. Understand sequencing risk, while keeping in mind the principles of good investing and associated habits.

Prepare for a post-retirement crash

Over your retirement, you’re likely to experience at least one market crash. Your response to these events will determine your ability to preserve capital. The better you are prepared, the less likely you are to make mistakes.

Investing in your 70s

Those who have reached retirement and are now relying on their investments face three key questions in 2023.

  1. Should I adjust my spending in this environment? Is my capital going to last?
  2. Can I do anything to safely generate more income from my portfolio?
  3. How do I avoid the big mistakes that will cause me to run out of money?

For many investors in their 70s, this decade in retirement offers time for desires like travel, quality time with growing family and friends, and the pursuit of hobbies that were hard to fit in before.

But all of this costs money, and retirees wonder how much can they can spend in retirement without outliving their money.

“Setting a sustainable withdrawal rate - or spending rate, as I prefer - is such an important part of retirement planning, pre-retirees and retirees who need guidance should seek the help of a financial adviser for this part of the planning process,” says Benz.

She adds that at a bare minimum, anyone embarking on retirement should understand the basics of spending rates: how to calculate them, how to make sure their spending passes the sniff test of sustainability given their time horizon and asset allocation, and why it can be valuable to adjust spending rates over time.

Here are some tips for investors in their 70s to consider:

Enjoy your wealth

We can become overly defensive when we cease working. However, a personalized approach, including a clear succession plan, may help you enjoy your wealth – you’ve worked hard to get to this point!

Think about your withdrawal strategy

Investors in “withdrawal mode” can become defensive and short-term orientated. A portfolio bucketing approach can help clients remain focused on the long term.

Focus on outcomes, especially cashflow

As investors enter retirement, outcomes become far more important than relative gains. Tie outcomes to their goals, with a specific focus on funding your retirement cash flow needs.

Supporting others

You may need to balance your own financial security with the distribution of your wealth to others. An income-oriented portfolio can help by distributing to others while retaining the capital for future use.

Behavioural coaching on sequencing risk

No one wants to run out of money in retirement. Understand sequencing risk, while keeping in mind the principles of good investing and associated habits.

Prepare for a post-retirement crash

Over your retirement, you’re likely to experience at least one market crash. Your response to these events will determine your ability to preserve capital. The better you are prepared, the less likely you are to make mistakes.