Retire Young and Wealthy

There are many ways in which you can make sure that you will have some safe income for your retirement but how much and how secure depends largely on how much of a risk taker you are and what are you willing to do for that money. To be certain keeping an active lifestyle and taking care of your investments are the best ways to make sure that they will yield the highest returns. However, the more money your investments bring, the riskier they are and you may not want to trouble yourself with such matters instead of relaxing and enjoying you retirement. And it is from that point of view that we shall analyze together your options.

Immediate annuities

The simplest way to ensure that you will have a steady stream of income during your retirement is to pay an insurance company a lump sum of money and they will pay regular annuities back to you. Here the only thing you need to be careful with is that the there is no provision about how much money or for how long they are willing to pay. That means that if you were to leave for another 100 years they would still have to pay you the regular annuities whereas they are betting that you will not leave for so long as to use up all the money that you have initially paid.

Total return portfolio or bonds

A riskier type of investment is to create a stocks portfolio that will certainly last for many years to come if you invest wisely and do not withdraw too much from it. A good withdrawal rate is anywhere between 4% to 7% per year, so you should start planning early so as to own a big portfolio by the time you decide to retire. The risks are higher here and you may want to think about hiring a financial consultant, at least for the first few years until you learn the tricks of the trade. And then you can keep using his services so as to not worry yourself or you can take control of your own portfolio and thus maximize your profits.

Investment property or REITs

A great investment has always been in buying properties and renting them out. The only problem here is that you will have to invest a lot of your own time and resulting money in further maintenance and you can be sure that sooner or later some situation will develop where you will have to invest more than your average light bulb change. However you can pass la that responsibility to a Real Estate Investment Trust, REIT, and they will handle all maintenance, all unforeseeable events, collect rent, pay expenses and, after deducting their own fee they will also pay your share. However this solution will pay less money than if you handled everything yourself but it will also give you the time to handle other investment opportunities or to just relax.

Safe Investments

Whatever choice you make, even if it is the simple option of the immediate annuities, you should also think very hard about investing some money in some safe investments because even insurance companies fail but the banks or the government does not. So you could open a bank savings account or buy government issued securities or even invest in certificates of deposits. These are the kinds of savings that do not bring back a lot of cash but that are as safe as the very civilization we leave in.

Luchian Manescufelt is a well known guest blogger covering various topics including finance. He also contribute in different gold investor forum & active member of such communities.