For those who plan on retiring between the age of 55 and 60, you have to consider that you may live until you’re 95 or 100. Will you realistically have enough in savings and retirement to live comfortably for that long? If you aren’t planning ahead, the answer is probably no.
Three Ways to Have a Stable and Comfortable Retirement
Most people don’t expect to live lavishly in retirement – especially if they never practiced exuberant spending during their careers. What the average retiree wants is stability and comfort. They hope to be able to enjoy their time off without stressing over bills, monthly income, debt, and penny-pinching. But how can you make your ideal retirement a reality?
1. Invest in Annuities
You’ve probably heard of annuities in the past, but have you genuinely considered them as a strategy for earning income during retirement? Here’s how they work: You make an investment in an annuity and the fund then makes regular payments to you on a future date. There are even plans that guarantee to pay you for the remainder of your living years, which can be a great strategy for people who are afraid they’ll outlive their retirement accounts.
When considering annuities, make sure you review various companies and what they offer. There are many different plans, fee structures, payout structures, and terms – so it’s wise to do your due diligence and speak with professionals.
2. Establish Diversified Retirement Accounts
Are you planning for retirement with specific retirement investment accounts? You may think it’s too late to get started – or be afraid of risking your nest egg in the stock market – but the reality is there are many diversified products designed for people in every stage of life. Even if retirement is just 10 years down the road, there are things you can do to grow your money in that small time frame.
The important element to focus on is diversification. You don’t want to go and throw all of your money into the stock market and pray that it’ll be at a higher point when you’re ready to pull out. Spread out your money and protect your assets.
3. Invest in Passive Streams of Income
There are two types of people in retirement. There are individuals who work really hard for 30 or 40 years, save as much money as possible, and then develop a plan for spending in retirement. This is what we’ll call the “slow leak” strategy. Money slowly leaks out over time until everything is gone. Then, there are individuals who work really hard for 30-40 years, save up as much money as possible, and then develops a plan for making even more in retirement. We’ll call this one the “revenue-focused” strategy.
Whoa, I don’t want to work in retirement! Don’t worry…there’s very little work involved in a “revenue-focused” strategy. For the most part, it’s about putting your money to work for you and acquiring passive streams of income. This could come in the form of rental properties, peer lending, or anything else that requires minimal time and yields steady revenue.
Make the Most Out of Retirement
The definition of retirement is “the action or fact of leaving one’s job and ceasing to work.” The key phrase there is “ceasing to work.” While there will be times in retirement where you’ll want to work – perhaps as a consultant or part-time somewhere – the point is that you’re largely in a state of relaxation. Money shouldn’t be something you constantly stress over and you should be able to enjoy your work-free years. That’s how it ought to be, and that’s how it will be if you have a plan.