Safe Investments to Help Ensure a Happy Retirement

elderly couple with their bikes

Retirement is supposed to be a time to relax and enjoy the fruits of 40+ years of labor. However, this can only be done successfully if you have made the right financial preparations well in advance. Although no investment can be guaranteed, below you will find a few examples of historically safe investment options that will help ensure that you are able to make the most of your retirement years without having to worry about how you will do so.

Age Plays an Important Role

When looking for safe investment options for this time of your life, it is imperative that you take your current age into consideration. As you get closer to retirement age, you should ensure that your investments lean more towards being conservative instead of aggressive or high-risk. For example, if you are in your 20s or 30s, you can still afford to take bigger risks such as investing the bulk of your money in the stock market. However, after reaching your 50s and 60s, you should consider safer options like an immediate fixed annuity or even a Certificate of Deposit (CD).

Bonds

When you purchase bonds, it means that someone else out there owes you money and will regularly be paying you interest. When this investment tool is used in conjunction with a well-diversified portfolio, the safer bond options such as those issued by government agencies, federal government agencies and other corporations that have proven themselves to be financially sound, they can provide you with a great source of income during your retirement years.

Interest from CDs and/or Savings Accounts

When the prevailing interest rates are favorable, this can be another fantastic way to make a safe investment for your retirement. However, in many cases, you will not be able to rely on this interest alone unless you have a substantial amount of cash invested in savings accounts or the CDs because they generally attract interest rates of around 2% to 3% at the most. This means that on every $100,000 that you have invested in them, you will obtain an average of $2,000 to $3,000 per annum interest – minus broker and/or account fees that may apply.

Immediate Fixed Annuities

If you are looking for an investment that is potentially safe and more predictable , you could consider an immediate fixed annuity. These involve having a contract drawn up upon purchase that will provide you with a guaranteed and specified stream of income for a specified amount of time. These annuities will normally start paying you almost immediately – usually the month after you have purchased them, and then monthly thereafter.

Other relatively safe and reliable forms of income that you can take advantage of to help ensure that your retirement will be free from financial stress can include income from rental properties; real estate investment trusts (REITs) or even home equity in some cases. If desired, you can even consider supplementing your retirement income through part-time employment. Contact us here at Dream Bridge today so that we can help you determine what will be best for you.

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How to Properly Educate Yourself on Retirement before Taking the Plunge

How to Properly Educate

Many people put off planning for their retirement, thinking that ‘it is still too far in the future to worry about.’ However, the saying which goes, ‘The future arrives one day at a time’ perfectly describes why it is crucial for you to start learning as much as possible about retiring – before you hand in notice to your employer. Below are a few ways in which you can educate yourself about this crucial period of your life.

Read as Much as Possible

These days, there are numerous blogs, news sites and a range of excellent books that are devoted to the topic of retirement. Taking the time to read up on topics such as various investment options that are available to you, how to deal with your new found free time and whether or not you should continue working to supplement your income – and keep occupied – will help prepare you for when you are no longer working full-time.

Speak with Other Retirees

An excellent way to gain as much insight as possible into retirement is to speak with as many people as possible who have already gone through the process of stopping work and who are now living on their investment income. In most cases, these people will be able to provide you with hints and advice about how to cope and make the most of your golden years. Many retirees will even be able to point you in the right direction when it comes to looking for a reliable investment specialist or broker as well.

Always Obtain Professional Financial Advice

Although fellow retirees may be able to advise you with regards to which investment brokers or companies they are using, they will not be able to tell you where or how to invest your money. As a result, you need to ensure that you obtain as much professional financial advice as possible before entering into any agreements or purchasing any retirement products. When searching for the right investment broker, it’s important to trust your instincts and obtain as much information about them as possible before agreeing to work with them.

Start Saving Early

A surefire way to guarantee a retirement that is as stress-free as possible is to make the right financial choices beforehand. The earlier you start saving and investing for this period of your life; the more you will be able to enjoy watching your money grow year upon year – thanks to the magic of compound interest. Don’t make the mistake of waiting until you are in your late 40s or 50s to try and start investing for retirement, as you could find that you will need to invest as much as 60% to 70% of your disposable income just to be able to scrape by in your 60s and 70s.

If you would like to find out more about how you can retire happier or you would like to obtain investment advice, get in touch with us here at Dream Bridge today.

 

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How to Get Millennials Thinking about Retirement

How to Get Millenials

Although a large number of millennials are savvier with their money than previous generations, statistics are showing that they aren’t focusing nearly enough on their retirement years. Many of them are under the impression that because Social Security is available, they don’t have to worry about saving anything for this period of their lives. However, it is actually imperative that they start thinking about their retirements as soon as possible.

“Now” is the Right Time

According to a report published by The Fiscal Times, up to half of millennials don’t have a 401(k) of any sort and only around 30% have stated that they are actively planning for their retirement years – shocking statistics. A general attitude among millennials is that they want to enjoy themselves right now, so they put off saving for as long as possible. It is crucial for anyone of this generation to realize that “now” is in fact the time for them to be thinking about the (not so far off) future. After all, a wise person once said, “The future arrives one day at a time.”

Educate them about the Power of Compounding Interest

Many of the millennial generation haven’t been taught about the sheer power of compound interest – which is usually most beneficial during their 20s and early 30s. For example, a 20 year old who starts with a $1,000 lump sum investment and adds $100 each month at a 4% interest rate will end up with approximately $73,000 after 30 years, whereas a 50 year old who starts with the same amount and invests the same $100 for just 10 years will only have a paltry $16,000 in savings. In short, the longer millennials wait to start saving, the more they will have to put away each month if they want to have a comfortable nest egg to retire with.

Get them to Stop Throwing Money Away

These days, many employers are offering sponsored retirement programs, usually in the form of a 401(k). Although the 3% match that is offered by most companies doesn’t sound like a lot of money, it will add up substantially over time – once again, thanks to compound interest. In most cases, partaking in the employer match program is voluntary, which means that millennials who don’t sign up as soon as they are eligible to do so are literally throwing away a 3% raise. This is one scenario that can definitely be classified as receiving free money, which is why the millennial generation needs to ensure that they take full advantage of it.

Although it can be tempting for millennials to spend their pay checks on the latest gadgets, vehicles and exotic vacations, it’s imperative for them to remember that all of this will come at the detriment of their financial futures. Millennials who would like to learn more about how they can secure their financial future – one day at a time – can make contact with our team of experienced advisors today.

 

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Tips to Plan for Retirement if you are Single

Tips to Plan for Retirement Single

Many singles in their 20s and 30s are normally so focused on building their careers and lives in general that they don’t really give retirement much thought – especially if they are still single. The reality though, is that the sooner you start planning for this time in your life, the less you will have to worry about whether you will be able to afford to enjoy yourself a little once you stop working.

Save as Much as Possible

As a single, it is strongly recommended that you save as much as you are allowed to in your tax-deferred accounts each year. While this may sound like a tall order, it’s important to remember that you will not have the financial help of a spouse to cover bills such as rent or mortgage costs and other day to day expenses. It is also essential for you to start building an emergency fund that is equivalent to between 3 and 6 months of expenses, as you won’t have the security of a spouse’s income or savings in the event that you are injured or unable to work for any reason for an extended period of time.

Consider a Second Form of Income

If you find that you are struggling to max out your tax-deferred savings accounts each year or you are not able to put anything away towards an emergency fund, it may be worth considering the idea of taking on a second job for a short while. This can be a financial lifesaver, especially if you have consumer debt that needs to be paid off – after all, you certainly don’t want to still be worrying about repaying debt at a time when you should be focusing on being able to enjoy yourself as much as possible.

Protect Yourself Financially

Being single, you are also at higher risk of financial ruin if you become too ill or disabled to work for any reason. For example, if you were to become ill or disabled in your 40s, you would need to have financial safeguards in place to ensure that you will still be able to look after yourself well into your 60s, 70s or even 80s. As a result, it is imperative that you have disability protection in place. When purchasing disability protection, it is essential to check that payouts will in fact cover you for as long as necessary – many of the cheaper policies will only pay out for limited periods, so it is recommended that you enlist the help of a financial advisor when signing up.

Planning for your retirement as a single need not be a daunting process, especially when you take the above mentioned advice into consideration. Spending and investing wisely during your working years will help ensure that you are able to sit back and relax as much as possible once you have stopped working. If you would like to find out more about how you can prepare financially for retirement, get in touch with us today.

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