How to Choose a Safe Retirement Strategy

Understanding how to choose a safe retirement strategy is important, because the newspapers are full of stories about social security funds running out in the near future. This means that retirement plans for business owners and individuals will end up being the main source of retirement income for many. There are some tips and hints that can help with informed retirement strategy decisions.

The first tip is that retirement funds should never be placed in high risk investments, since these can end up causing a loss of all investment capital, and leave one without savings to live on during retirement. Slow steady gains are much better than volatile up and down swings when it comes to market and portfolio performance. It is better to stay even than go backwards, so choose stable investment choices which may offer small gains but do not fluctuate excessively. Another option is choosing a large company, such as Coca Cola or McDonalds, which fluctuates very little and offers a dividend payment.

Knowing how to choose a safe retirement strategy means being realistic about future needs, because these needs must be calculated to ensure enough capital is put aside for retirement. Many people forget to include healthcare costs into their retirement budget, as medical insurance is often covered heavily by the employers. Once a person retires, the healthcare benefits have to be covered personally and these can be costly. Medicare helps offset some of these costs for retired individuals over a certain age, however relying on this service can be like relying on social security and it is a program that could disappear. Social Security was never intended to cover complete retirement costs, and having other investments available for retirement is critical.

Many retired people have started to supplement their retirement funds with part time enjoyable jobs throughout their retirement. This is a great way to stay active but work at your own pace. If this strategy is used, make sure that the working place picked feels more like a hobby than work. Many employers benefit from this since retiree’s schedules are usually flexible and most of the time they do not need to worry about paying extra benefits for part time workers.

The number one piece of advice is capital preservation. Always protect the investment capital where retirement investments are concerned, because this is money set aside for future expenses. No matter how great a deal is or an investment seems, never place retirement capital at risk. Any capital that is invested in high risk/high reward opportunities has got to be funds that could be lost, and are not necessary for day to day living. Be wary of any investments which seem too good to be true, or that offer higher than usual returns. Far too often individuals lose their entire retirement savings because of a deal which seemed amazing but was actually a scam. In these instances it pays off to do proper research on the investments and ask for help if necessary. There are many companies and tools out there that are great for a preliminary education on certain types of investments.

The information supplied in this article is not to be considered as medical advice and is for educational purposes only.