For most people, the retirement idea means moving into a more relaxed lifestyle and enjoying the things they never had when they were working, such as recreational activities, traveling, family and friends, and those favorite hobbies. For this reason, it is always advisable that everyone should protect whatever they own or make investments that will ensure that you have a stable income when you retire; after all, that’s the fruit of your sweat. Let’s look at some high return investment plans that you should consider before reaching your retirement age.

Retirement Benefit Scheme

It is always advisable for all employees to join a retirement benefits scheme when they are still working; this will make a massive contribution upon retirement. When you retire, you should aim to have at least 70% of the income replacement ratio.  Most elderly folks have an income replacement ratio that's below 50% in America; hence most people must increase their retirement savings. Based on the retirement benefits scheme that you belong to, you might be able to access the retirement benefits as a combination of periodic payments and a lump sum, or they might offer you a one-time lump sum. All these depending on whether you were a provident fund or pension scheme member. You can always join MyRetirementRehab, whereby your future will be safe and secure irrespective of your current retirement or employment situation. Using such a retirement benefits scheme, you can tailor your adaptable retirement strategy that will ensure that you have a constant income flow, and you will be insulated from all possible financial shocks.

Upon receiving your retirement benefits, you will have numerous investment options at your disposal. You could decide to start a business, invest in a rental property, or take a vacation that you have dreamt about all your life; your options are limitless. However, as you make your investment plans, remember that those benefits are meant to sustain you for your entire lifetime; therefore, it would be wise to invest in options that would support your lifestyle your whole life. With the current financial situation, most of the elderly folks are uncomfortable with their savings; hence you must consider passive strategies as a means of retirement income. Generally, there are two recommended options; converting your benefits into a drawdown fund and buying an annuity.

  1. Annuity

This refers to a contract between you and an insurance company whereby the insurance company is under obligation to offer you either monthly, quarterly annual income, based on your agreement. Upon retirement, you select an insurance provider and buy an annuity; you probably have one year to decide on the provider that suits you. Once you decide on your most preferable provider, they will determine the type of annuity that they feel suits you. It is important to note that once you pick a type of annuity, you will have to stick with it your entire lifetime. The available annuity options include systematic annuity withdrawal, joint and survivor annuity, a life annuity with a guaranteed period, and a single life annuity. All the annuity options have different regulations, therefore, ensure that you enquire from your provider before putting pen to paper. You can also sell annuity payments if you need cash fast. 

Your dividends will rely on several factors, such as the benefit options, your age when you purchased the annuities, and the amount of money you spent when buying the annuity. In most cases, the more the conditions that the insurer offers you that may include the next of kin or a guaranteed period, the lower your monthly dividends will be.

  1. Income Drawdown

This option allows retirement benefit scheme members to receive their benefits as an income. Upon retirement, you transfer your accumulated benefits into your income drawdown fund; then, you will receive regular monthly payments for a minimum of 10 years. Based on your retirement needs, you can agree with the provider on the amount and the frequency of your withdrawal. When you make any withdrawal, your funds will remain invested and will continue earning interest. The income drawdown allows you to benefit from the income that is generated from the retirement benefits investment. Generally, you will be assured of a regular monthly payment, and you can relax knowing that your finances are sorted.

Generally, most people fail to invest in their retirement until its too late. However, with the above investment plans, you can relax and know that your investment in a specific institution will yield interest; therefore you can plan on having those vacations or spend your time playing that sport you dreamt about your entire life.


Sharing is caring!

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.