It is an important financial decision that we save towards our retirement. However, the problem comes with knowing the type of retirement product to choose. Without proper retirement knowledge, we end up choosing the wrong options. This is because of misinformation from banks and even our friends and family. This can then definitely be one of the most important reasons to find a personal financial planner, in order to create and make the right decisions when it comes to organizing retirement finances. To improve your or others retirement knowledge and planning, it could be worthwhile looking into How to find the best financial planner for you. This will ensure the correct proactive steps can be taken to increase financial security throughout the elder years and especially during retirement. A financial planner will be able to take these five points below and more, in order to improve finances for those that are less likely to have a solid income due to old age.
Here are five ways we can choose the ideal retirement option.
Investing in Real Estate
For those of us who don’t mind the work of managing different real estate investments, this can be an ideal retirement cash flow for us. I have realized that real estate investment is especially beneficial to those of us who are approaching retirement and didn’t save enough during our younger years.
Real estate has different options, for example owning a rental property or buying land to build properties and rent them. Before jumping to real estate it’s recommended that we choose a financial advisor that can give the best options. People end up making losses because of choosing the wrong option and this is mostly because of misinformation.
Having Immediate Income Annuities
An immediate income annuity provides a guaranteed income for us when we retire. All forms of annuities ensure our future income. When we choose an immediate income annuity, we pay an insurance firm a certain amount of money and the insurance firm guarantees us income for life but for an agreed timeframe.
We should choose a quality insurance firm for this type of investment. There are people that choose fixed income annuities and others choose variable income annuities. It’s best to choose one that will increase income with inflation however we should keep in mind that our monthly income will reduce.
The good thing with annuities is that a person can choose the period of time that they want to have it. Income annuities are good for people who don’t have various sources of income.
When we buy a bond, we loan our money to either a government or a corporation. The borrower for example the government agrees to pay us interest for a specified amount of time. When the bond has matured our initial principal is given back to us. Bonds can offer us a consistent source of income if we invest wisely.
There are different types of bonds, the short- term bonds, long-term bonds and mid-term bonds. The best thing is to choose the type of bond that we want according to the financial retirement goals that we have.
Having Pension Plans
Pension plans are common among people who want to retire. It’s easy to have pension plans when we are working because our employer contributes a certain amount of money to our pension. Hence when we retire, we take our pension income.
Pension plans are however not common like before because they give little income. But, for those who love pensions, it’s still a good option.
Having an Emergency Fund
An emergency fund is kind of a safe investment for our retirement plan that is different from other types of investments. An emergency fund has the ability to rescue us when we in a financial crisis. Especially short term financial crisis. It saves us from using our savings. The ideal goal is to have an emergency fund that can rescue us for six months.
Unlike past generations, we are blessed to have a variety of retirement options. The only problem is knowing how to choose the best one for us. However, with the knowledge in this article we have the ability to know the type of retirement option to go for according to our financial goals.