Far from being the end of an era, retirement should mark the beginning of a new phase in life, your golden years full of enjoyment and relaxation. But a successful, comfortable retirement requires careful financial planning, in order to keep you in the style to which you have become accustomed.
When you retire your regular employment income will come to an end, but with a smart portfolio of investments, you can guarantee a steady and reliable income stream to support your lifestyle throughout your later life, whether you want to move to a larger home, lavish gifts on your family, or explore European cruise ports on luxury vacations. Here are a few of the best investment options to consider for your retirement plan.
Dividend-Paying Stocks
Stocks in established blue-chip companies are a solid, secure bet, offering a consistent income stream in the form of dividends. Publicly-owned companies redistribute a portion of their profits to shareholders in the form of dividends, providing a regular source of cash for retirees. The best companies to invest in are low-risk options – established businesses with a history of regular dividend payments, strong financials, and a sustainable business model for the future.
Real Estate Investment Trusts (REITs)
Real estate is one of the best and most secure investments you can make, but buying multiple houses or apartments isn’t always on the cards for everyone. Real estate investment trusts are a great gateway into real estate investing, allowing investors to own shares in a portfolio of properties that bring in income, like rental units or commercial buildings. REITs usually offer a great return on investment and distribute a substantial portion of their profits month-by-month, making these some of the best investments for retirees.
Bonds and Fixed-Income Securities
The pattern with retirement investment portfolios is one of low-risk options. Once you’ve retired you don’t want to have to worry about your income stream, so rather than shooting for the moon, you want something stable and secure, even if the yield is lower. Bonds and fixed-income securities are some of the most conservative and predictable investments around, offering regular interest payments and return of principal on maturity. With a range of options from treasury and municipal bonds to corporate bonds and bond funds, they offer a solid, safe, and dependable income for your golden years. It is worth researching the duration, quality of credit, and interest rates associated with specific bonds or securities, to ensure that you build a diversified portfolio.
Annuities
Annuities were originally designed as insurance products to provide financial support and a guaranteed income stream during retirement, so it is no surprise that they are one of the most popular investment options for retirees. Depending on the type of annuity you will receive a regular flow of payments over a particular period or for the rest of your life, with interest rates either fixed or variable according to the market.
Dividend Growth Stocks
While most stocks provide regular dividends, dividend growth stocks consistently increase their payouts as time goes by. This gives retirees the possibility of actually increasing their income once they retire, making the prospect of finding the perfect property for retirement on a beautiful Panama beach a reality, and is a great way to protect against inflation and cost-of-living hikes.
A carefully planned and well-diversified investment portfolio is one of the most sensible ways to prepare for retirement and provide financial security and peace of mind. The key to managing the risks associated with investments as well as maximizing returns is to diversify across asset classes and income sources. Investing can sometimes be a tricky business, and it is always worth consulting with a financial advisor who will be able to help you set goals and come up with appropriate strategies to make your golden years your best ones yet!
