Lifestyle Fund

See: Lifestyle Creep.

What do a broke 22-year-old college student, a 42-year-old working mom, and a 72-year-old retired grandpa have in common, other than probably having far too many SpaghettiOs in their lives?

They can all benefit from investing in a lifestyle fund: an investment fund that changes and grows as we do.

When we’re young, we might have less money to invest, but what we can spare, we’ll likely choose to invest a little more aggressively. By the time we’re 42, let’s say we’re holding it down with a house, a family, a decent job, and a minivan. Our earnings are much higher than they were two decades ago, and now we’re really ready to save for retirement. Our investment needs have changed, and our lifestyle fund is changing with them: we invest more, but maybe not quite as aggressively.

We look into different types of investments and maybe consider purchasing something like an annuity to complement our increasingly diverse portfolio. At 72, retired and living in a condo in Florida, our investment needs have changed once again: now we’re living off the money we’ve been investing all those years. We don’t want a ton of aggressive investments that could end up losing us a bunch of money, because our earning potential isn’t great enough to recoup big losses. Luckily, our lifestyle fund has us covered. Our brokerage firm understands our needs and continues to adjust our lifestyle fund accordingly.