Saving for one’s retirement or golden age when one working should not be necessity for solely earning money is a basic saving criterion for every working individual across the world. The whole idea is to save enough money so that as the age progresses, work should be matter of choice and not for daily livelihood. Golden rule for saving for one’s old age is investing the maximum amount every year in any tax advantage authorised retirement plan.
Investor should choose a mix of various products rather than putting whole saving in one portfolio.
There are various plans which are considered best retirement investment plans for anyone. Let’s understand them one by one:
- Total Return Portfolio: This is the most common way of creating a retirement income by forming an own mix of stocks and bond through an investment broker.
- Retirement income funds: These funds automatically allocate the money across the diversified portfolio of stocks and bonds generating a monthly income. Investor has full access to their money and the principal is withdrawal as per requirement.
- Immediate Annuities: Usually issued by Insurance companies, it provides guaranteed income. A lump sum of the money is deposited the Insurance company in return of guaranteed sum of monthly income. Profitability of this plan depends on lifespan of the investor.
- Stocks and Bonds: One can also invest in a mix of stocks and bonds individually or buying the through a mutual fund.
- Real Estate Investment trust- This is basically a mutual fund that owns a real estate. These trusts manage the property in terms of maintenance and administration. They deduct their fee and provide the remaining income to the investor. This should be a part of diversified retirement portfolio.
A complete and diversified mix of portfolio of investment plans with appropriate tax advantage is a must for every individual to live peacefully in the last years of life. A certain portion of money should also be liquid in case financial emergency comes up which may require the investor to take out some money.