When you’re retired, you want to be able to maintain a reasonable income level while still accruing a little bit of wealth to keep you in the lifestyle you deserve. While you may have invested to build your nest egg, now that you’re in your golden years, how can you keep the money train moving forward?
We think investing in retirement should be as low-stress as possible. You have plenty to worry about without having to grit your teeth because the market isn’t performing as you need it to. But how can you be sure that your next investment is stress-free?
Here are some ways to make this experience as breezy as possible.
Transparency - Where is Your Money Going?
One thing that can cause a lot of stress for people (retirees or not) is not knowing where their money is at any given time. If you just hand over a check and wait for the results, you can wind up with a lot more stress than you deserve.
Any ideal investment strategy should give you comprehensive information about your money - where it is, where it’s going, and how you can monitor it. In fact, you have more data than you know what to do with.
Transparency is the hallmark of any good investment because there is little chance that something bad could happen. While you may not be happy with the way the market is going, at least you know precisely where your money is when it happens.
Another primary source of stress and grief with investing is having the element of risk hanging over your head the whole time. If you’re worried about how things are going from day to day (or minute to minute), then it can put a damper on your retirement. You should be worrying about how much sun you’re getting, not whether your money is going to vanish overnight.
When picking out a low-risk investment, you want to see some history to understand the rate of return you can expect. If things are volatile over the long term, then you may want to steer clear. However, if there is little variance over time, then it’s a much safer bet.
One thing to consider, however, is that stability doesn’t make as much money. When you go with a high-risk investment, you can either lose it all or win big. Betting on a sure thing means that you won’t be seeing the same kind of return percentages. However, the idea here isn’t to get rich - it’s to keep money coming in reliably. Leave the high-risk returns for the young bucks who don’t have as much to lose.
Obviously you want an investment that carries as little risk as possible. But while there is no such thing as a no-risk investment, there are some which are more predictable than others.
Again, you might not experience massive spikes with these kinds of options, but you can at least begin to count on the results that they might give you.
You want to look for something that will offer some level of protection both your initial deposit as well as any interest rates. Our investments, for example, are secured against a mortgage and all mortgages are provided to our Trust Company – SCFL Nominees Limited – with these mortgages held on behalf of each and every investor in those particular loans.
Plus, because we are upfront about the rates of return, you can practically calculate your performance ahead of time and know precisely how much you’re going to get back.
Overall, the more predictable the investments, the more you can enjoy a stable income and enjoy your retirement!
One issue with some investments is that it can take time for them to grow. CDs, for example, can require you to keep the money locked away for 25 years before you can touch it. While that’s an excellent investment for your younger self, retirement isn’t a waiting game.
Because you don’t know how long you’re going to be retired, making these kinds of long-term money moves are not the best choice. Theoretically, you should already be earning cash from these investments you made 30 years ago.
Thus, when picking out the best investment strategy for retirement, you want to pay attention to the payout rate and structure. Can you withdraw your money at any time, or will it be locked in for a while? How often can you withdraw as needed? How often will you be paid a return on this investment?
These are questions to ask before you sign the deposit cheque. You don’t want to get locked into something where your money is untouchable - what happens if you need it before then?
Overall, when it comes to investment opportunities, you want to be able to make decisions about how your money will be spent. For example, can you pick an investment plan that works for your needs? Can you choose a different rate of return based on specific variables?
Being able to control your money can relieve a lot of the stress involved with investing. Because you are the one in the driver’s seat, even if you pick a strategy that loses some of your capital, you can feel better about it because it was your decision. When you give control to other people, it can be a little nerve-wracking if you can’t reach them when you need to, or even have a point of contact that you can deal with.
At Southern Cross Partners, we work as a partner in managing your investments. That means you know who you are dealing with and you are only ever a phone call away from being able to reach them should you need to. We think that is the biggest relief there is and that, when you add up all the above, you might enjoy investing in your retirement by partnering with us.