Investment Advice for Seniors

As an increasing number of people are living longer, planning for retirement and old age is more important than ever. Safe investing and planning needs to be done to avoid difficulties once retirement age is met. Although AARP membership may be 50 years of age, the age of retirement in the United States is wavering between the ages of 65 and 67. This means there are people who are living up to one-third of their lives in retirement, but without the ability to earn money like when they were young.

Important investment decisions need to be made in the years leading up to retirement instead of waiting until the last minute. Fortunately, there are still options to be considered for those who are either rapidly approaching retirement age or have already made it there. A simple savings account is better than nothing, and establishing one as soon as possible will at least net you a small amount of interest income.

An annuity is another option in which you pay a chunk of money up front into this account and you will receive tax-free income from this account for the rest of your life. There are potentially many fees and deductions, but for those who own their own home, but need assistance with income, an annuity could be the answer.

Many people have had the option of investing in their company’s 401k plan. If you took advantage of this during your working years, you likely have some income from that investment. The markets are all down and it is worth consideration to reinvest some of your earnings from your 401k or pension plan into the stock market. With a bit of research and planning, you can quickly turn around a small investment into a large profit. Of course, there is always a risk when playing the markets, so make sure you have access to financial advice before risking your limited income in this arena.

Investing as a senior citizen means your investment strategy will be vastly different from your strategy as a young or even middle-aged adult. Intermediate-term (3 to 5 years) and balanced-term goals are likely to be your approach, or perhaps income-oriented and short-term goals with a horizon of 1 to 3 years. No-load mutual funds are a fantastic option when you have a minimum portfolio size of $10,000 USD and the ability to invest aggressively up to 70% of that in large value bonds. Short-term corporate bonds are income-oriented bonds that work well for quick turnaround.

Investment bonds offer a great deal of elasticity in your investments, as there is typically not a fixed term. Another benefit is that you can increase your investment at any time without penalty. Income for life is one of the best features of guaranteed income bonds and is worth your time to consider. Adequate research and understanding should be retained before investing. If you are unsure of the investment options, talk to a financial counselor or planner who can assist you is choosing the best structured income plan available from the many companies who offer such plans.