If you invested and saved well before you retired, you should be sitting well during your golden years, provided that the markets stay afloat and you can afford to live off your investments and savings. You will want to continue investing throughout your retirement.
Annuities and fixed-income investments
Annuities of all kinds provide valuable income streams in retirement. They pay out a certain amount of money periodically to you, and can last until you die. The amount they pay out may be fixed or variable.
Investments such as bonds, CDs, money market mutual funds, and certain forms of stock can pay out fixed rates of earnings to you. These investments are considered low risk, as there is little chance they will lose value. Because they are low risk, fixed-income investments are popular among retirees.
Taking on risk
Much of retirement investing is focused on taking on as little risk as possible, since you have less time than before to recoup any investment losses. The goal is to balance the risk and the reward so that the former is minimized while the latter is maximized; this takes planning and work, and often the help of an investment advisor.
But what if you want to take on more risk? In that case, it is imperative to plan properly and envision all scenarios, as time is starting to work against you. Ask yourself questions such as these:
Paying off debts
It's worth taking your debts into account. If you want to leave assets to your heirs, you don't want debts hanging over your estate after you die; neither do you want to see a car or a home repossessed, or your credit rating damaged. Elderly people also benefit from a healthy credit rating. Consider paying off your debts before you begin actively investing.
The field of retirement planning has grown greatly over the years. There are now specialists in retirement planning who earn degrees in the field and have experience working with clients. These specialists undergo training and examination to be qualified to assist individuals with their plans. Working with a qualified financial planner can be very helpful.
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