Over the years, the same mantra has been beaten into your head time and time again: save as much as possible for retirement.
But what are you are supposed to do when you finally retire? How will you treat your money?
Investing in retirement is a great idea. Not only can this help you earn more money during this period of your life, but it will put you in position to leave something behind to your children or other beneficiaries.
A Few Things to Remember
First and foremost, you should not invest your money during retirement the same way you did earlier in life. Keeping the same investment mindset could quickly lead to added financial stress – which is not something you need at this point.
While there is no way of knowing how long you will live, plan for your retirement savings to last 30 years or longer. To make this happen you cannot afford big losses. During your 30’s and 40’s there was nothing wrong with riding the ups and downs of the stock market. In retirement, you are no longer afforded this opportunity. Instead, you have to be careful of taking on too much risk.
Index funds are common among retirees interested in investing. These have a lower cost, as compared to other investments, and require less monitoring.
Are you looking for an even safer investment? Consider certificates of deposit (CD). You don’t have the chance to earn nearly as much money, but at the same time you are not taking a big risk. With CDs you are investing and earning while also playing it safe.
Here are three pointers to keep in mind if you are thinking about investing in retirement:
- Know your money including how much you have and what your budget entails.
- Assess your risk tolerance.
- It is better to be safe than sorry – big losses can kill your retirement savings.