Your investments should work hard and give you a solid return. There is no doubt that investing does have some inherent risk to it, but don’t lose sight of the fact that the goal of saving money is for it to provide a return. You need to both protect and grow your retirement investments over the long-term. Once you get into retirement there are also many things that you can do to deploy your investment savings wisely. Options run the spectrum from making healthier choices all the way to getting a part-time job that keeps you active and is close to your passion. Forbes has an excellent summary of ideas that will enhance your retirement income while you are in it.
There are also investment tips that people of any age can apply when looking to make retirement investments go further. The following summarizing six tips for maximizing your return on investment without taking an excessive amount of risk.
1. Invest in fixed income securities – Fixed income investments are most commonly made in the form of bonds. Both corporations and government entities will pay you interest for your loans. The great part about fixed income is that it gives you a steady stream of interest that is reliable and steady. The only work of caution is that you need to be confident in the financial stability of the entities that you invest in to mitigate potential bankruptcy risk. The six tips in this article are great ways to make your retirement money go further, but there are also investment methods to maximize retirement income. The Balance has focused on additional ways to supplement retirement income in this article which can also be applied if that is your focus area.
2. Diversify your investments – You should never have all of your investments with one type of security. You should look to invest in equities, bonds, real estate and even gold to hedge against one asset class driving down your entire portfolio’s return.
3. Invest in EFT’s – Exchange traded funds are meant to mirror stock market performance. These investments will take the emotion out of investments for you and are a good way to get equity exposure that isn’t tied to the fortunes of one or two companies.
4. Limit your investment expenses – It is critical that you are able to limit all types of expenses, especially the ones that are recurring in nature. If this isn’t watched, investment expenses can eat into returns over the long term.
5. Income tax planning – You should meet with a tax specialist to work through a tax strategy for your investments. The tax implications of buying and selling securities can be material and you don’t want to forgot to contemplate them before you complete the transaction.
6. Build and stick to an investment plan – The biggest tip for retirement investments is to have a long-term plan that you are going to commit to fulfilling. If you aren’t comfortable doing it by yourself, sit down with a certified financial planner to get something on paper because it is imperative to have a plan that you understand and can execute.