Retirement Investment Planning

Retirement investment planning ensures financial security in the post retirement period. The resulting retirement benefits prove to be of great use for retirees. A considerable amount of money should be invested in retirement investment plans. Money must not be withdrawn indiscriminately from retirement accounts.
An individual’s various retirement investments must be monitored regularly. Both social security and investment in stocks may contribute to an individual’s retirement. The first step to success in retirement investing is to develop the habit of saving early in life. Next, a sound investment strategy is necessary, one which allows for an amount of risk but also enhances the average annual returns on investment.

Investment in short-term government bonds and government treasury bills are two examples of areas for retirement investment. Investment in stocks can also be an option.

But a major risk associated with stocks is the volatility of returns. Investors should allow themselves at least 5 to 10 years before retirement if they want to look at stocks as a serious retirement investment option. One must be disciplined and focused if one is to receive maximum profits from investment in this arena.
Bonds and T-bills do not lose their value, and hence, can be safe investment options. Income accrued from bond interests are taxable. However, the benefit from these investment plans, which are not tax sheltered, is that with a little amount of prudence, investors can gain a considerable amount of post-tax income.

Annuity is another viable option. This insurance product ensures a fixed amount of money on an investment until the expiry of the annuity contract. The insurance benefits that are received include death benefits and assurance of investment returns to the beneficiaries. The rates of interest associated with annuities are high. They also ensure protection of income throughout the annuity holder’s life.

People can also invest in mutual funds for retirement. Long-term financial goals can be well satisfied from mutual funds. The procedure of investment in mutual funds is quite simple and a mutual fund account should be opened first to carry out the entire process. Such investments are very cost effective. The 401K retirement plan is a good option if employees have the opportunity to take advantage of it. It is an employer sponsored retirement plan.

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Last Updated on : 5th July 2016