4 ways to invest your retirement money

by Speedprop on December 6, 2018

Once you retire, your relationship with your money changes. You would no longer be drawing a monthly paycheck and you will still need to come up with a certain amount of cash to cover your daily cost of expenses. Most people find this overwhelming if they don’t have enough savings in their retirement fund. But, it is still a worry for those who have well-planned their retirement money. This is because once they stop earning, their retirement fund will slowly lessen as they don’t have an income coming in to replenish the fund. Hence, the fear of it running out over the years can be extremely frightening.

To deal with this, you need to plan and invest your retirement money smartly. This is so that you will always have enough money to rotate for the rest of your life. Here are four ways how you can invest and grow your retirement fund.

Real estate

One way to increase your fund is to invest in real estate. Once you have one or more properties under your belt, you can rent the properties out and this will ensure retirees will receive a steady stream of income on a monthly basis. Even though the market is quite down at the moment, but most people can still make a decent amount of money from rental yield. However, there are still risks and costs involved. As the owner, you will still need to pay the mortgage, taxes, insurance, maintenance, and repairs whether or not the real estate is rented. But, once you find a tenant, you will  get a monthly paycheck in the name of rental, and this will allow you to be financially secured.

Stocks

Stocks basically represents that ownership stakes in companies and it is a great investment opportunity for retirees who will need it five or more years down the road. As those companies grow, their shares can increase in value, too. That means unlike any other investments, stocks have the potential to beat inflation and taxes over time. They work very well for long-term market returns, but pretty lousy for near-term returns. But if you have a big enough portion of your investment in stocks, in good years, you could harvest gains that’s extremely positive.

Certificates of deposit (CDs)

CDs offer a way to earn a little more interest in your money than you’d get in a typical savings account. The downside, though, is that you usually have to pay a penalty if you want to withdraw your money before the CD matures. The returns generally aren’t amazing, but they are great to provide you a short-term holding area for money you’ll need to replenish after daily spending. For instance, if you set up a CD with maturities ranging from a few months to a year or two, you can use your maturing CDs to cover the cash you’re spending in your everyday life.

Bonds

Bonds can play an important role in a retiree’s financial picture. Although there are a fair amount of risks to it, but the advantage of bonds is that they generally provide higher rates of interest than CDs or cash accounts do, while still having a known maturity date when you’re expected to get the bond’s face value back. In fact, the known payment schedule and expected maturity value makes them great investment options for money you don’t immediately need but might need in the next two to five years or so. This gives retirees a chance to plan their finances well and not be dependent on anyone.