As a person approaches retirement age, he/she has to plan for life post-retirement and invest accordingly. The tips and suggestions provided here will help you select the best and also the safest channels of investments for life after retirement.
Life is a bloody race of humans, and it kicks off in preschool and ends on the day one’s retirement. The days of retirement are basically, the winner’s lap of success through the cheering crowds. These days of retirement are the ones where you sit back and enjoy beauty of life. To have a satisfied, healthy and happy retirement, you of course need to have some reliable funds and a fat account at your bank.
Tips for Safe Investments
There are a couple of things that you need to take into consideration, while you plan your investments and finances for your retirement. A really good dosage of the big ‘Vitamin M’, needs to be planned crucially and the investments can last well over an entire decade.
- Save up a portion of the paycheck and deposit it into the investment channels described below, in a proportion as per your choice, convenience and most important of all in a proportion that suits your necessities and needs.
- Next off, choose investment channels that suit you in doing so, ascertain your own needs and requirements, retirement aspects, health related factors, etc. Basically you must consider the different possibilities that the future may hold for you.
- How early you start planning, saving and investing for retirement is basically up to you, yet the obvious rule of thumb is that earlier you start, the better and bulkier are the returns. Ideally mid 30s and late 30s is a sound time to start the process.
- Towards the later periods, you may also increase the volume which you are investing into the retirement planning accounts, funds and channels.
- Lastly calculate, the rate of return, total and periodic amount which you would owe to the channel or vehicle of investment. Most important of all you should, certainly calculate the percentage and actual rate of return and how much the fund you investing in is going to grow. It goes without saying that the more the better and also the faster (more returns in less time) the better.
- Last but not the least, it is risky to put all your eggs in the same basket. Hence divide the investment into several different proportions so that you get multi-rated-returns, plus a definite security.
Safe Investments for Retirement
Some of the following investments are really long term in nature and hence get the appropriate returns at the appropriate time, you will need to plan beforehand.
IRA, SSA and 401(K)
On of the best thing about these three investment facilities is that they are operated by the government and hence they have excellent returns, tax benefits and are very, very secure. The Individual Retirement Account (IRA) and the 401(K) are two accounts where you can go on investing money, tax-free and with returns over time, till a certain limit, both time wise and amount wise.
You would be paying the social security tax throughout your life and for the old age you can apply to the countless programs that are offered by the Social Security Administration (SSA), the Retirement, Survivors, Disability Insurance (RSDI), are reportedly really useful.
An annuity is a kind of combination of insurance and Collective Investment Scheme (CIS). In such scheme, you will have to make a set of installment payments to the annuity company. After a certain number of years the annuity company starts paying you periodic returns. Often the installment and returns schedule overlap each other.
The annuity also has a death benefit and in some cases, ailment detection clause that is upon the detection of certain specified ailments, the company pays in extra. There are two types of such annuities, namely, the fixed annuity and a variable one. It goes without saying that the variable annuity is the riskier of the two, though it often carries a minimum return clause.
Retirement Income Fund
A Retirement Income Fund is a sort of comprehensive portfolio which can be taken up just like an annuity. The specialty of this portfolio is that you go on investing into this portfolio during the installment and payment phase. During the payment phase, the investment company pays off a specified income to you on a monthly or yearly basis, like a pension or a salary. This fund is one of the best retirement investment strategies.
Mutual Funds and Life Insurance
The mutual funds and life insurance policies operate in the same manner as the annuities. Both these channels constitute of an investment and returns schedule along with a death benefit. In case of mutual funds, the chance of making profits is always present and so is the minimum returns clause.
Apart from the Social Security Administration (SSA) initiated insurance policies, you can also get specified insurance policies depending upon your personal ailments, such as dental policy with denture clause. Such policies do save a lot of money and will also prevent any sudden burden from falling on your shoulders.
Government securities would basically help you have a very, very safest of investments. Though the rate of return is less, there is an assured fixed amount that you would receive.
Funds and Schemes
Some investment companies make plans and financial products that involve the regular installment payment and a returns phase. In case of such schemes the installments and returns structure is common, however these funds are high-powered aggressive funds that churn out great returns. The difference is that such specified and retirement centric funds have their installment payments till the person retires, after which a steady flow of returns is provided.
There are also some other options such as gold, shares, bonds, etc. However the drawback of such investments is that you cannot immediately realize them or gain profit from them, you need to liquidate or sell them at a perfect and appropriate time in order to get good returns.