So you have accumulated a handsome amount of your money in your retirement savings and you are eligible for Social security. Now the question from most retired people is ‘What are the best investment options after retirement?’
Before answering this question, let us talk about what factors post retirement could affect your investment decisions.
Risk: After retirement, since you don’t have a regular job that brings in monthly income, you may want to go for conservative investment (low risk) options that do not deplete your original investment.
Maintenance effort: Some investments such as real estate may require a lot of human effort to take care of it in terms of maintenance. If you don’t have energy and people around you to manage the same, you better avoid such investments. Retired life is meant for peace and not to generate additional headache and pressure.
Frequency of returns: Your post retirement investment should offer regular returns so that you can meet your monthly budget requirements with the same.
Your monthly budget: What’s the amount of money you require for a typical monthly budget.
Excess money saved up: What’s that excess amount of money that you have saved up beyond what’s required for your retired life (Read: How much money do I need to retire?)
Your best investment options
The following are some of the investment options for your retirement life as they offer less aggressive and low risk route.
- Monthly Income Plans
- General Bond funds (short term)
- Government Bond funds (short term)
- Bank Savings accounts
Ensure that you check out the Morning Star ratings your instruments before making an investment decision.
Avoid these investments
The following is only a guideline on investment types to avoid. Of course, if you have several millions in your hand after all those regular income investments and wondering where to throw your money, you may consider one or more of these as well.
- Stocks, shares and other equity market linked products
- Illiquid investments
- Real estate
- Precious metals and stones
In summary, enjoy your retired life without taking risks with respect to your investments.