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5 Investment Strategies for Retirees

People often wonder what they will do after retirement, and whether their collected finances and assets would be enough to source life to them. They do not think about making money even after retirement. The money sits and chills in their bank account, without any increase or decrease. Surely, there is a risk in any investment strategy, but there are also ways to properly manage it and tackle it strategically. If you have a fear that all your money in a bank account would finish in sometime then why not take another fear and invest it somewhere. There are many possibilities that you can increase your savings and make retirement income.

Any investment strategy is subjective, i.e., it depends on your capital that you can invest without fear of loss and also your appetite for risk. There are shares which are volatile but give out a handsome amount, and then there are shares which are least risky but guarantee not such a princely sum. It is all up to how much you can take. Let us see some strategies to multiply your retirement income:

Immediate annuities

These are indeed the most important methods in building up your retirement income. With the use of an immediate annuity, you are making sure of your future income. In exchange for a fixed payment, the insurance company is providing you a fixed retirement income for the agreed period. The guarantee is all dependent on the image of the company. There are fixed immediate annuities as well as variable immediate annuities. Some offer incomes that are dependent on inflation, although that means you might receive a small amount in the beginning. It is also a good idea to consult a financial advisor before moving forward with this technique. He will give a valuable insight and much clarity on which annuities to invest.

Balanced funds

These mean that you invest in different areas like equities, mutual funds, fixed deposits all according to the risk to reward ratio. The risk to reward ratio is the ratio between the worst case possibility and the best case possibility. Your main aim anywhere is to contract the former and expand the latter. The most prominent benefit of this technique is that it can handle loss in any one of the sectors where you have invested while the other sector is blooming. It balances all your risk to almost nil if invested thoughtfully through proper analysis. If you have little idea about technical analysis or fundamental analysis of stocks, then again, visit a financial advisor for an improving your average retirement income.

Bonds

Buying a bond means lending your money to either the government or a company. The borrower agrees to pay you a certain amount of interest for a particular amount of time, and when the bond matures, you get back your principal amount. High-quality bonds, such as Treasury bonds or highly rated corporate bonds, are preferred by investment giants because they give an assurance that your money will be returned without any defaults. Top retirement bond funds can be used to form a bond structure with their maturity dates set to match your future financial needs. This investment strategy is referred to as asset-liability matching or time-segmentation and it proves to be a tried and tested one by most retirees.

Real estate

Investing in real estate is the most insured and guaranteed financial support. It is because the price of lands bought will never go down until any natural calamity like earthquake or hurricane destroys it. The population of the earth is ever increasing, and so is the demand for land for people to live. You just need to maintain the properties before pitching to them. This can become your retirement income business instead of an investment strategy. You can also rent houses or flats to people. Here you need not maintain anything. Just sit back and relax and your bank account will flourish on its own. Don’t invest in real estate before enough knowledge and spadework. If you don’t do your homework properly, it is likely that you’ll flush down your money. Read books on real-estate investment. Talk to people who have done it and make a proper strategy before executing any action.

Dividends

Shares and securities are some of the best ways to increase your retirement income. Stocks that issue dividends as regular returns are a steady source of income. You can also choose to buy dividend income fund, which will manage and pay dividends to you. Don’t go for higher yields of the dividend returns than the nominal value, because it is often associated with high risks. Dividends have another drawback that they might be reduced in the time of financial crisis. Their expiry date is out of our hands. Look for the blue-chip stocks that have had a great image throughout many years. These will not let you down and would also give out a handsome dividend sum.

It is necessary to plan for retirement income, and there is no better way to earn some money than investing money in bonds!

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