The Key to Saving Even After You Retire: What to Do When Investing Post Retirement
Retirement means the start of your golden years and the end of your working life. A lot of people spend their lives working hard to get to this point and save in preparation for it. There are a lot of options for people to gradually build their retirement nest eggs before retirement and there are many after retirement that helps people in retirement keep their savings growing and last them well beyond what was initially put into it. This can lead to a lot of people to enjoy a comfortable retirement at the level they want to maintain.
What to Invest in?
It’s a good idea to keep your money active and working for you well into retirement. It will mean you will have extra savings available for when life gives you unexpected challenges to deal with. It will also mean you can replace your clothing as it wears out or covers the rent if you need to move. This will give you an added level of security a lot of people of retirement do not have.
People who are retired need to pick investment plans that will keep their money generating more of itself because letting it sit is just letting it disappear gradually. There are money market accounts available that can be tailored to senior investors who need a more conservative approach to their lives and a large chunk can be put into a savings account with good interest that can be held for a couple of years if you think you won’t need that money in the near future.
Investing in Bonds
Where to invest after retirement should be as diversified as your pre-retirement accounts. Bonds will not make you the high returns you can get on other accounts, but it will let your money grow steadily and they will probably be stable if inflation hits. They are not the best tools for building your portfolio, but when you have hit retirement they are perfect for preserving it and letting it mature. It is also more stable because you will not want to take such big risks that late in life because you might not have the time to let it grow back.
When you buy bonds, it is a good thing to buy a series of bonds with dates that have maturity dates that are staggered out over time so you can have periodic chunks of cash come in rather than getting it all at once. This can be helpful when you have those anticipated, yet unexpected funds come in.
Mutual funds are another good way to let you invest in a variety of bonds with dates that come due in a sequence. This gives you income regularly and you get the added benefit of having a professional manage it.
Investing in Stocks
Stocks are considered a risky investment for any person regardless of age though they are seen as na better tool for younger people to help grow their investments. There are stocks that can be wise investments for retirees. It is said that the percentage of stocks in your portfolios should be 100 – your age. That means for each year you achieve you should decrease the amount of money you are investing directly into stocks and move them into more secure and stable investments.
If you are going to invest in stocks when you are older you should look for stocks that are more stable, have growth prospects and maybe a dividend which will allow for slow monetary replacement in your account as you age and use the funds. This also means that the funds you do use are being actively replaced over time.
Mutual funds are another good investment for anyone of any age. They are usually managed by some of the best people in the business and they will be made by people that understand how the market will move and grow. It will also allow you to invest in many different areas of the stock market which reduces your risk by protecting one group of companies with another group in a different sector.
Investing in Certificates of Deposit
A good low-risk investment for retirees is certificates of deposit (CD). These accounts take a chunk of your money and hold it for a specific amount of time. The interest gets compounded on a regular schedule and after a time of anywhere from 1 month to 10 years you will get the money back with the interest that you have made during that time period included. You can’t touch the money until the time period is over without incurring extremely high penalties, but these are good investments that will give you your money back with interest with little chance of risk. The longer the account is put into place for the more interest it will make based on the initial amount invested.
Certificates of deposit are a great way to space out your investments over a specific time period and to have them come due periodically. They are also almost no risk so you will get your money back plus more when they come due.
Investing in Real Estate
Having a property to rent or lease out to people is a good source of income for retirees. It can also be a way to keep busy and keep the costs associated with owning a piece of property down by doing a lot of the maintenance yourself. If you charge enough money to cover the mortgage and the taxes; then you can be money ahead on your investment.
This is a good investment if you can put the time and energy into managing the property. You are also a landlord to people who are depending on you to help them keep the property up and manage it wisely. If you cannot do this you can always hire someone to manage it for you.
Final Thoughts
There is a lot of ways to manage your money well into retirement that will make sure your investment stretches as long as you need it too. Part of life is figuring out what works for you for where you are at in your life at the present moment. It is also looking ahead and considering what will be good for your future and will lead you to the most comfortable retirement possible.
