Planning for retirement should always start early and there are several incentives when you start early. There’s a saying ‘early bird catches the best worms’, similar is the case with financial investments. If you start saving today, the interest you gain over the long run is quite high compared to investing at a later date. The best time to start investing for your retirement is in your 20s, as you have that enthusiasm and drive to work hard and earn more. The best part of investing early is with time and a little bit of luck with your investments you can accumulate a lot of money through the compound interest you earn. So here we give you a list of best investments for retirement which you can choose and make your future safe, and by the time you retire have millions in your pocket. You may like to get some mutual funds investment advice so that you know the benefits of investing in it for your retirement.
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Best Investments for Retirement Income
Whether you are employed in a company, or you are self-employed, you never know what the future has in the store for you. You may meet with emergency situations, wherein you may need to spend thousands of dollars at one go. Yes, you may have insurance coverage or other similar products to cover you, but that may not be enough. So it’s always important to start investing for retirement at a very early stage. Some of the best retirement savings include:
One of the best investment options for retirement which has the potential to provide a steady income is an immediate annuity. Of course, it depends on the reputation and the strength of the insurance company you are dealing with. The benefit of such an investment is that you pay the insurance company a lump sum amount, and in return, the company promises to pay you an income each month as long as you are alive. In case the unthinkable happens, the insurance company keeps the rest of the money. However, if you live long enough, the insurance company keeps paying you till your death, and this amount can be substantially higher than what you have initially paid.
Total Return Portfolio
This is another excellent retirement planning option wherein you can create an income to be used after you retire. You need to create a portfolio of the bond index and stock fund and it’s so created that you can achieve a respectable rate of interest in the long run. The best part is you can withdraw a specified amount every year, and this amount varies and increases slightly in years when inflation is high. You can also opt to invest in Individual Retirement Account (IRA), which is another good option.
Even though there are costs of maintaining it, a piece of real estate property can be the best source of retirement income, wherein you get a steady amount each month through rent. Moreover, the price of an investment property is always on the rise, and in case you want to sell it, you can get a substantial amount of money when you sell it. You can use the money to invest in some other financial product of your choice, which will give you a steady income. You may like to know more about real estate investment so that you know its pros and cons.
Best Retirement Stocks
If you are thinking of investing in stocks and bonds which you can use after retirement, then it is one of the best options which you are exploring. Compared to other types of investments, stocks have always outperformed them in the long run. The best stock to invest in is government treasury bonds, but as you may know, stocks tend to fluctuate a lot, maybe even in minutes. There may be times when you buy stocks in good financial times, but when there is slack in the economy, you may lose that money. But then risky investments usually pay more than safe ones, except of course when they fail.
Any investor would demand a higher rate of return when they take more risk, and that’s the reason, stocks tend to return more. And that’s precisely the reason, why long-term bonds pay more than short-term ones. The sure-shot bet you can place on is government bonds and stocks. You can be rest assured that the government would never default, and the economy of a country remains fairly strong. In case there is a huge debt, the government can always print more money in case there is a need. So treasury bonds and stocks are considered low-risk investments, but in case of the interest rate increases, your return may suffer. But then that’s the case with all other investments. You may have also heard of buying gold as an investment, and this is also a good option you can explore.
Thus, there are several options for you to decide which is the best investment for retirement for you, but always remember to look at the pros and cons of each option before you zero on one. For stocks and bonds, consult with an investment advisor, so that you know all the risks associated with investing in stocks.