If you have retired or if you are planning to retire in the near future, it’s fundamental to modify your investment strategies so that you can maintain your lifestyle during your golden years.
Since you will no longer have a salary to rely on, you need to do everything you can to stretch your savings and extract the maximum possible returns from your investments.
Here are five secrets of successful retirement investing of which you should be aware.
Plan for five years at a time
If you are 60, you can expect to live to the age of 80 — which is close to the average lifespan of an American — as long as you do not have any serious health problems.
Since calculating your financial needs for the next 20 years can be a challenge, it is a good idea to break your retirement life into five-year segments.
This will help you make time-targeted investments that can generate sufficient income to meet your financial needs over the next five years.
Every five years — depending on your financial situation and market conditions — you can revise your investment strategies or continue with them.
Invest to generate passive income
Up until now, you might have invested for growth so that you could build up a substantial corpus for retirement.
Now, you need to start investing for income so that you can protect your capital and have sufficient income to meet your day-to-day financial needs.
You can invest your money in bonds, certificates of deposits, annuities, dividend stocks, money market accounts, and rental real estate to earn passive income.
Invest in real estate
One of the best ways to generate passive income during your golden years is to invest in rental real estate.
Investing in a residential or commercial real estate property in an area with low property taxes can help you earn passive income on a monthly basis.
It is also an excellent way to build long-term wealth, as the value of your property might increase substantially in the future.
Develop the habit to save more
It is extremely important to continue your saving habits during your golden years. Unless you have managed to build up an enormous retirement corpus that you cannot outlive, you need to be careful about what you spend your money on.
By saving more you can not only build a financial cushion that can protect you against unforeseen expenses but also allow you to invest more and achieve financial security.
Consider taking up part-time work
If you are industrious by nature, you might find it hard to sit at home all day and lounge around. In that case, why not take up a part-time job?
Better yet, why not become a freelancer and monetize your expertise?
From bookkeeping to tutoring, consulting, copywriting, pet sitting, and teaching English as a second language, there are many things you can do to make some money on the side without straining yourself too much.
The money you earn can help you pay for your day-to-day expenses while your investments will continue to grow in value and help you achieve financial security.
With the right kind of investing plan, you can build a strong foundation for your retirement life and make the most of your golden years.