Personal Risk by Age:

At various points in life, we have various types of personal risk.  Property, relationship, safety, financial, liability, life, heath risks are personal risks that vary by age.  Here is a quick piece on how to think about your personal risks by age.

When a child’s age – life is carefree and children take risk accordingly, the risk is normally borne by their parents (both emotionally and financially).  Things and experiences are all new to children, so they are in exploration phase.  The children bear the physical risk -broken bones, etc.   But health insurance, food, shelter, personal property – all provided by or gifts from parents and relatives.

In late teens is when children start bearing some personal risk – car insurance, personal property, employment risk/wages, etc.  This is the first level of independence but also first time many young people start experiencing risks.  Given this new experience of responsibility – this age is also overwhelmed with carelessness and poor decisions.

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In the early 20’s, individuals are starting to or just finished college, first job, car, apartment, etc.  Individuals in their twenties are mostly responsible for themselves and their personal property.  They may be in relationships and have some risks associated with and shared with their partner in the relationship.   They have risks to these as well as their own health/well being.  Risks associated with travel and transportation.  Financially most in their early 20’s are just getting started in life and have little to protect, however, as they progress into late 20’s – they start bearing more and more financial risk (investment risks), personal property risk, and health risk.  Life insurance is on the radar of young adults.

See also...Marriage and Risk: How Getting Married Changes Your Insurance:

In their early 30’s, couples are married or starting to get married and starting families.  Some may own their own homes or be thinking about buying a home.  As personal assets grow, so does the risk to these assets.  As a provider for a family, financial loss may be incurred as a result of disability of an income earner, leaving you, your family, or your business financially insecure.    In their late thirties, they have kids, home, plus all the responsibilities of their twenties.

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In their 40’s, couples and individuals are starting to experience different risks depending on their financial health and career success.  They may own their own business, have multiple homes, rental properties, etc.  Children are getting older and new risks associated with their children activities.  Risks associated with losing a job, sickness, investment risk, etc.  All of these different scenarios present different types of risk to the individual or couple.

In their 50’s, many become focused on a few major events – retirement, children’s college/graduation, paying off mortgage, etc.  These are major events – protecting income, assets, and financial freedom are important.  But none more important than your health.  Risk to your health is paramount throughout your entire life.  Again on the financial side, varying levels of success can provide for various levels of protection.

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In their 60’s, for many risk tolerance and activities are pretty well defined by this age.  Protections are well implemented.  Physical and health related illness becomes one of the greatness risks to the individual and couple.

Post retirement, all of the underlying risks at previous ages apply, but now is the risk of not living a full and happy life.  Some may have the risk of not enough retirement savings to live comfortably or risk of not having enough savings to live to >100 years old.   Health insurance costs and living expense fluctuation is concern for those living on fixed income.  Relationship risk  – life is full of relationships, family, friends, co-workers and acquaintances – these relationships risk fading or ending at this age.

See also...Average Net Worth by Age

Other types of risk throughout your life include credit risk, market risk, liquidity risk, reputational risk, systemic risk, etc.

This is a highlight of standard risks and may differ from individual to individual.  It’s important for you to evaluate your own risks – an act and protect yourself accordingly.

Comment below with thoughts or comments.  

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Arnold Smith

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