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Retirement Reasoning: 3 Investments To Consider Now

Saving for retirement should be a part of your investment strategy as soon as you begin your adult employment. The actions you take today will help you manage the money you make during your working years, to invest for a time when you can relax and enjoy the benefits of your labor. Finding the right investment venues is not difficult. However, it does require some time and investigation to understand the benefits of each type. Here are 3 investment vehicles that have a record of providing income for your retirement years.

1—Have A Mix Of Stocks And Bonds

One of the most common points of advice given by financial experts is to create a portfolio of both stocks and bonds. The stock portion of your portfolio allows you to take advantage of current business trends. The bond portion allows you a stable rate of return for the future. As the years pass, you should adjust the percentage of stocks and bonds toward bonds to reflect your growing need for stable return. 

2—Purchase An Annuity

You can think of an annuity as a sort of pension, that you purchase yourself. Insurance companies sell them, and they take on the risk of market drops and how long you can be expected to live. They provide a guaranteed income, with a minimum of management hassle. However, experts recommend the purchasers of annuities carefully investigate the fees involved, which can be higher than other financial vehicles. Annuities have two phases an accumulation phase and a distribution phase although you can compress the “accumulation phase” into a single payment if you have the lump sum available. Annuities are highly flexible and can be tailored to your personal needs before you purchase it, but it is a contract so once it is finalized, neither you nor the issuing company can change the terms. This is both an asset and a liability to you since although your income is guaranteed if your situation changes drastically you will be subject to a penalty if you want to cancel the contract. This is why you should only have a portion of your portfolio in an annuity to provide a baseline income no matter what happens during your retirement.

3—Buy Property That Produces Income

Income property, such as residential or commercial buildings, can be an excellent way to ensure a steady flow of money for your retirement years. However, the rental market follows different rules than residential property ownership, and you should research the rental market carefully in the area where you intend to purchase. A number of factors can influence which properties are most desirable for rental income. Your local real estate professionals can direct you to helpful information on this subject, to help you make the right decision.

Investment experts advise individuals facing retirement to think about their finances in terms of total return, using a number of investment vehicles to reduce risk and increase return. These three investments have a record of providing a significant return on investment on a consistent basis. They are also investments that are available to most people who are working toward retirement income. If you do some research, you will find that they may provide the safety and reliability you need for your later years.

If you are really interested in advancing your knowledge of various investment products you can even enroll in an online masters finance program.

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