Everyone has to think about their retirement at some point. You don’t want to reach your 50s or 60s and realize that you’re not going to have enough money to live on once you stop working. Perhaps you won’t be able to afford to stop working, which would be a disaster if you have no choice due to ill health. Ideally, you should think about your retirement funds as soon as you have a steady income. As your life changes, you can alter your approach to savings and investments, depending on your family and lifestyle. There are lots of different ways you can invest your money to be more comfortable in retirement. Have a look at the ones below for some solid options.
Employee Retirement Account
If you’re just starting to muddle through the options you have for retirement, your employer is a good place to start. If they offer a retirement account option such as a 401(k) or 403(b) plan, you have access to an excellent value account. These investment options come with significant tax benefits. They’ll grow tax-free until you begin withdrawing from them when you retire. And you won’t pay tax on either the money you put in or take out, depending on the account. But remember that there are limits on how much you can put into them. If you want to invest more, you will need to look at other options.
Personal Retirement Account
You can also have a retirement account that’s independent of your employer. For example, you can open an individual retirement account (IRA). You can get some of the same or similar tax relief benefits as you’ll get from a 401(k) although you have to check the rules for eligibility. You can use an IRA to invest in gold and other precious metals, offer a private mortgage or even buy property for yourself. However, like employee retirement accounts, you can only put so much into your personal account each year.
Stock and Bond Portfolio
If you want to have more control over how much money you put into your investments, a portfolio of stocks and bonds could be better. While a regular investment account doesn’t have the same tax benefits of specialist retirement accounts, you’ll have more control. If you decide to go down this route, getting advice from a broker or financial advisor will help you make the right choices and choose the best investments. As you continue to invest, you’ll learn what to look for.
Some people prefer to put their money into physical assets, such as gold or property. Investing in property is very popular with a lot of people planning their retirement. Real estate can be sold to release its equity and make a profit or rented out to collect rental income. If you read the SMSF property advice by Blueprint Wealth, you can see the benefits of putting your retirement funds into a property. Hard assets make good long-term investments if you’re planning to hold onto them for ten or 20 years.
It isn’t easy to plan for your retirement. Predicting how much money you’ll need and working out the best way to make it is complicated. But it’s better to start thinking about it as soon as possible.
Image Source: 401(k) 2012