Don’t you think, you can still enjoy your later years if you make a financial plan? No doubt, proper planning is crucial to creating financial retirement security. There are so many reasons to consider when planning to retirement. Don’t forget the issues like healthcare costs, nursing-home care, holiday costs and others. In this article it’ll be explained where you should put your savings when you’re over 65.
Stock your assets soon
If you want to create a retirement plan, then it requires to evaluate your existing assets. No wonder, you must also include cash savings, pension funds (if any), and annuities. Do you own physical assets? So, assess your physical assets, like home, cars, antiques, rent, land, and anything else that may generate retirement income. It is a plus, if you need more liquidity and access to your funds over the coming years, as you may invest a portion of your money in stocks, bonds and mutual funds.
But, one thing to remember: it will never be a good idea to put everything in one investment. You can invest among stocks, bonds, mutual funds. Furthermore you can alternatively invest across a range of industry sectors and investment vehicles. This can lead you to reduce your risk and help boost the overall return of your portfolio.
Certificates of deposit (CDs)
You can go to your local bank and open up a CD of your desired duration. Nowadays, CD provides anything above 2.4% to 2.5% and the good news is that, there are no income or net worth minimums to invest, unlike other investments.
Fixed income / Bonds
The great thing is that Bonds will provide a defensive allocation to an investment portfolio. Also, government bond is a plus, and you will get all your coupon payments and principal back when matured.
Invest on physical real estate
If you want to take risk and can manage property, then real estate can be a powerful semi-passive income stream into your investment. You can generate your income from real estate, you either could rent out a room in your house, or rent out your entire house or buy a rental property.
There are other sources too to invest.
One of the things that will surprise you is the tax advantages of this type of investment. The depreciation and rehab costs (purchasing distressed properties) can be huge deductions to yours income taxes. Furthermore, index investing is not great in terms of passive income, although it is a powerful tool for building net worth.