Managing Long-Term Finances: Key Factors to Consider
Long-term financial planning is not merely about increasing assets, but also about how an individual manages financial goals, handles risks, and ensures that needs can be met at various stages of life.
Amidst increasingly diverse financial needs, the public must consider financial management strategies tailored to their specific circumstances and objectives. This ranges from preparing children’s education funds and purchasing homes to preparing for retirement and ensuring family financial stability.
Data from the Indonesian Central Bureau of Statistics (BPS) shows that the Indonesian economy grew by 5.29% year-on-year in the second quarter of 2026. Cumulatively, the Indonesian economy in the first half of 2026 grew by 5.45% compared to the same period the previous year. Meanwhile, Bank Indonesia assesses that Indonesia’s financial system remains strong and stable.
These conditions serve as an important backdrop for the public to maintain focus on long-term financial planning. There are several key aspects to consider when developing a financial strategy:
- Define financial goals
The first step is to define goals clearly. Short-term needs differ significantly from goals to be achieved in 10, 20, or even 30 years.
Goals such as emergency funds, education costs, home purchases, and retirement preparation require planning with different time horizons. By determining goals from the outset, one can estimate the necessary funds and appropriate strategies.
- Align strategies with time horizons
Each goal has a different time horizon, so fund management strategies cannot be uniform. Funds needed in the near future generally require consideration of liquidity and stability. Meanwhile, for long-term goals, one may consider instruments with higher growth potential while understanding the accompanying risks.
- Recognise your risk profile
Before choosing investment instruments, it is vital to understand your ability and tolerance for risk. Risk profiles vary depending on financial condition, age, income, needs, and investment objectives. The choice of instrument should not be based solely on potential returns, but also on one’s ability to face the possibility of a decline in investment value.
- Consider diversification
Diversification is an approach used in portfolio management. By placing funds in a number of instruments or assets with different characteristics, risk is not concentrated in a single type of investment. However, diversification does not mean eliminating risk; investment values can still rise or fall based on the performance of the chosen assets.
In long-term investment management, the balance between potential returns, risk, and the suitability of assets with needs is crucial.
- Do not forget the aspect of protection
Financial planning must also consider risks that could disrupt the achievement of financial goals. Life, health, or asset protection can be part of a strategy to safeguard a family’s financial condition during unexpected events.
Thus, financial management is not only oriented towards how assets grow, but also how assets and income can continue to support family needs under various conditions.
- Evaluate periodically
Financial conditions and individual needs can change over time. Changes in income, family status, children’s needs, economic conditions, and approaching retirement age can affect previously established strategies. Therefore, financial plans need to be evaluated periodically to remain relevant to current goals and conditions.
This trend is reflected in the development of the life insurance industry. According to data from the Indonesian Life Insurance Association (AAJI), premium income from investment-linked insurance products (PAYDI), or unit links, reached Rp35.73 trillion in the first half of 2026, growing 10.3% compared to the same period the previous year. Meanwhile, new business premiums for PAYDI/unit links grew by 34.5% to Rp19.78 trillion.
In terms of investment management, the principles of prudence and diversification are part of the effort to maintain a balance between potential investment returns, risk management, and the alignment of assets and liabilities in the long term.
Several life insurance companies are also developing products that combine protection elements with investment options. One such example is Great Eastern Life Indonesia through GREAT Investlink Protection, an investment-linked insurance product (PAYDI) offering choices in Rupiah, USD, and SGD. This product is marketed through the bancassurance channel at OCBC with a Single Premium scheme. The company expanded its currency options by introducing USD in December 2025 and SGD in May 2026.
President Director of Great Eastern Life Indonesia, Nina Ong, stated that financial needs can evolve throughout life, so asset management must be adjusted to individual goals.
“After building assets, the focus is not only on asset growth, but also on how those assets can be managed more planned and diversified according to individual financial goals,” said Nina.
She added that financial planning during the productive phase can encompass both asset development and preparation for needs such as children’s education and retirement. As assets grow, needs may evolve into wealth management, long-term cash flow planning, and financial preparation for the family and future generations.