Long Term Retirement Planning Options
It’s no secret that sooner is better than later when planning your retirement. The more money you sock away at an early age, the longer that money grows and work for you. This gives you a better position to enjoy your retirement to its fullest. Keep in mind, you need to approach your retirement investments as long-term.
Sometimes It is tempting to risk it all for the promise of a high return on your investment but keep in mind that with great reward comes great risk and most of the time your security is simply not worth that particular risk. There are several different types of long-term investments that you may find to be reasonable and attractive investments.
Bonds, Mutual Funds and Stocks
Bonds are a popular long-term investment. These are like bank issued CDs with the minor exception that bonds are issued by the government. There are many kinds of bonds: government, corporate, municipal and mortgage bonds. Government bonds are generally the safest, while corporate bonds are considered the riskiest. For investors, the biggest risks are credit risk and interest rate risk. Selecting the right bond could bring you double the value over time.
Mutual funds are another popular investment for long-term investors. These are pools of money that are combined to invest in stocks, bonds, and other short-term investment ventures including securities. These funds are handled by a fund manager who decides where and how the money is invested. This leaves you to reap the rewards that his or her experience will bring in for you over time.
Stocks are another popular option for those interested in long-term investing. Investing in stocks is much riskier than investing in mutual funds though the payouts are often much more substantial. If you decide to delve into the realm of stock market investment, be aware that every transaction cost money and that you are taking a substantial risk with your retirement investment. It is highly recommended that you thoroughly research the companies and only invest in companies that are well established and show strong potential for future growth.
Real Estate: Another Option
Another type of long-term investment is real estate. While there are those that argue that the return on this investment is too minimal to save for retirement, I would argue that the fact that properly maintained and rented units will pay for themselves over time making them pure profit when the time comes to sell or simply to maintain a monthly income throughout your retirement. The more rental properties you own the better your financial position and the more options you have when the time comes to sell those properties. Real estate is one field in which fortunes are made and lost on a regular basis. Rental property is the safest bet for most when it comes to long-term investment and the most significant return on investment. There are options that go well beyond buy and hold when it comes to real estate. If this doesn't excite you some other options exists such as rehabbing property or the even more speculative field of pre-construction investing offers more appeal.
Before you make any major financial decisions, you should consult your financial advisor for guidance and advice. It is our responsibility to turn your limited investments into as much money as possible, secure your future and your retirement. The guidance that a good financial advisor provides when it comes to long term investing is invaluable and should not be discounted or taken for granted any more than the advice you would receive from a doctor or an attorney.