It is good to have a clear and well-defined goal towards retirement, but it should not be overlooked that investments and other sound financial decisions can also be made while the person is already enjoying his retirement years. Retirees also have other forms of income that they can expect other than income from employment, such as dividends from stocks and other financial products, payoffs from business deals or holdings, pension, and other forms of retirement income.
During retirement, you would want to enjoy your hard-earned money by doing things you have always planned on doing but did not have the chance to do while you were working. But this should not mean just spending all of your money without any regard for the short-term future or planning for emergencies and unexpected expenses. You can also look into some investment decisions that you, as a retiree, can maximize for viable returns and increased financial stability.
Here are some of the best investments for retirees:
- Consolidated IRA account. Depending on how long you were employed and how you managed your traditional pension plans or 401(k) accounts, you may have more than one IRAs, 401(k)s, and pension policies that you need to manage. It may be confusing or time-consuming if you have to keep up with too many accounts, so consider rolling them over into a unified account with good returns. You may also want to consider cash-outs or lump sum distribution in order to move your assets to other high-yield investments.
- Investment Property. Real estate properties can provide you with stable assets or income well into your retirement years. For instance, if you invest in rental houses, apartments, or other properties for rent, you can expect to have a flow of income coming in to be able to sustain your lifestyle. Of course, property investments also require maintenance and other requirements, but this should not be too cumbersome or take up too much of your personal time. Here are some more reasons why it would be wise for retirees to invest in real estate.
- Closed End Funds. When you are already in your retirement years, you know that you may not have the luxury of planning for financial returns that go over the next 10 years or more. As much as possible, you would want returns that are within the short-term future so you can still enjoy them. Closed end funds are good options for retirees because they are primarily designed to produce monthly or quarterly income. They can be included in your existing portfolio or other retirement investments.
- Real Estate Investment Trusts. If the idea of maintaining your own real estate or rental properties seems like too much during your retirement years, you can opt for real estate investment trusts or REITs instead. This is akin to a mutual fund owning and managing property on your behalf. You will be the investor, and the REIT manages, collects rent, pays overhead expenses, and distributes income. This way, you can invest in real estate, which is stable and has a definite valuation, without having to worry about the responsibilities yourself.
- Tax-Free Savings Accounts. Instead of spending all your income, you should still be responsible enough to set aside a portion of your available cash for unexpected expenditures. Look into savings accounts that offer tax breaks and also have higher yields so your money continues to grow. You can also consider starting a Health Savings Account which, according to this online article, some experts consider as a very good alternative to IRA or 401k plan. You may want to use your cell phone plans for seniors like these to call trusted family or friends for referrals.