One of the simplest investment truths is to not put all your eggs in one basket. Diversity is the key to having a financially successful retirement. There’s always a certain degree of risk you are taking when investing, so make sure you invest your retirement funds in multiple areas. Here are the optimal investment options to have a steady retirement income stream.
It’s pretty much guaranteed that you will receive Social Security benefits upon retirement. Of course, you shouldn’t rely completely on these payments because they probably won’t cover your monthly expenditures. There are some ways to optimize the amount of social security you receive and one of them is to wait to sign up so your payments will be larger.
401(k)s and IRAs are common funds for retirement. To avoid harsh penalty taxes, take out the required amount after you are 70 ½. If you are concerned with taxes, then think about a Roth account for 401(k) or IRA. You will pay some of the income tax on your saving. Your investment is made with after-tax dollars and if you begin taking money out on or after 59 ½ years of age then your investment is tax-free.
A pension isn’t as common anymore, but the Pension Benefit Guaranty Corp., a governmental agency that ensures pension, has guaranteed some private- sector pensions. It’s possible to create your own pension with an annuity.
If your home is paid in full then your largest monthly bill is taken care of- housing. You can also leverage the equity in your home by utilizing a loan or reverse mortgage. It may even be beneficial to downsize if your home and add to your retirement income.
Health insurance is vital for growing older and if you set up the right plan you could dodge lofty bills. If you are planning on signing up for Medicare, then don’t postpone signing up to avoid high premiums. Long-term care insurance might be a worthwhile investment just in case you develop a chronic illness.
Mutual funds and stocks are great investment options in general, but when it concerns retirement, they will keep you savings growing to keep up with inflation while you are enjoying your retirement.
Bonds are safe investment because potential loss if relatively low- and your-income stream will be foreseeable. Bonds like Treasury Inflation-Protected Securities do exactly as their name implies, ensure returns that are above inflation.
When you’re entering and in retirement you should at least have funds for a year that are readily available. Savings accounts and CDs have a low interest rate, but they are insured by the FDIC and are guaranteed to be available if needed.
Retirement is a season of life that should be enjoyed well, so set yourself up for success financially.
Kenneth G. Marks is an aggressive Social Security Disability attorney who will fight for you!
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