This article was contributed by Ambrose Jones
While you may have spent your whole working life investing in a pension, the investment process shouldn’t end once you’ve retired. You’ll enjoy a better quality of life and greater financial stability when you continue investing your pension pot after retirement. Here are five clever investment methods that retirees should consider.
1. Bonds
Bonds are one of the least risky and most dependable methods for investing in retirement. When you buy a bond, you loan money to a company or to the government for a fixed period of time known as the maturity period. The bond issuer pays a fixed rate of interest in addition to the original sum at the end of the maturity period.
Bonds are excellent retirement investments because they preserve capital while earning interest. There is a risk of losing money if the bond issuer folds and cannot repay the investment, so it’s important to check the bond rating of issuers before investing.
2. Property
Property makes for a great investment for retirees because it’s a reliable way to preserve capital while generating income in the form of rent. House prices have steadily risen over the last decade and it’s unlikely there will be a dramatic fall, despite some uncertainty due to rising mortgage interest rates. Although renting out property involves some work, you can hire estate agencies to manage your property so you don’t have to worry about vetting tenants or chasing rent payments. Should you want to release equity at any point to fund your retirement, you can simply sell the property with tenants in situ.
If you don’t want to become a landlord, you could consider flipping property instead. This is where you buy and renovate a property to sell it at a profit. This is a good option for retirees who want to keep themselves busy by overseeing a project, but it requires careful budgetary planning and is relatively risky for the uninitiated. It best suits those coming from a career in property or construction.
3. Real Estate Investment Trusts (REITs)
REITs are investment firms that generate money via property. They purchase and manage real estate and generate income by charging rent, accruing interest on mortgages, or selling property that has grown in value. Compared to investing in property directly, investing in a REIT gives you a completely passive income. There’s no work involved, and you’ll be paid in dividends, usually on an annual basis.
Since the real estate market fairly reliably over time, investing in a REIT is a good choice for those who are retired. You can use the dividends as a source of income while preserving your capital. Plus, you have the benefit of selling your shares at any point should you want access to the cash.
4. Multi-Asset Funds
A multi-asset fund is a series of investments in a variety of asset types that is managed by an expert in investment. Multi-asset funds typically include a combination of cash savings, bonds, stocks, and shares, and they can include things like property or gold. Some of them are designed primarily to build capital while others can also provide an income.
The benefit of multi-asset funds is that you spread your risk by holding several different assets at once, with the strongest assets offsetting the weakest ones to ensure a steady rate of return. This is beneficial for retirees who are reluctant to take on major investment risks. Plus, when you choose a reliable fund manager to take on the responsibility of investment, you don’t need to have lots of expertise to reap the benefits of a diverse fund.
5. Alternative Assets
Those who want to combine investment with a hobby can consider investing in alternative assets such as watches, whiskey, antiques, and art. These types of investments tend to be riskier than the likes of bonds and property, but they can offer good rates of return if you’re knowledgeable about them.
Keep in mind that any purchases you make ought to be made with careful assessment of the market in mind. 73% of purchases we make are spontaneous, but impulse buying can be incredibly risky when investing in alternative assets. Retirement is often a brilliant opportunity to indulge in special interests or luxury goods, so it makes sense to invest in an area that matches your expertise or that you’ve always wanted to learn about.
Invest Wisely for Peace of Mind
Making smart investments after retirement can give you peace of mind about your future. Diversify your investments and seek professional advice to make sure your money works for you.
Invest in a Personal Alarm
For extra peace of mind at home, consider investing in a personal alarm from LifeConnect24. Personal alarms are ideal for people who are worried about falls in the home, especially if they live alone. With a personal alarm, you can request help at the press of a button. This sends an alert through to our 24/7 Response Team, who speak to you through the loudspeaker in your base unit. If help is required, they will arrange support for you by informing your emergency contacts or, when necessary, the emergency services.
To find out more about the LifeConnect24 personal alarm service, read our helpful guide. If you have any further questions about the alarm service or our products, or to order a personal alarm today, get in touch with our friendly team by calling 0800 999 0400 or use our contact form.
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