Best Investments For Retirement Planning
From: forbes.com
People invest for many reasons. As a hobby, for their ego’s sake or to meet a medium-term goal, such as paying for college.
All are reasonable choices, as far as that goes. Investing as a form of entertainment is no sin. Certainly CNBC would cease to exist, otherwise.
But most of us have a real, long-term goal. However you choose to express it, retirement, your golden years, the day you stop working — it’s all about living off your money rather than continuing to work solely to make more.
The distinction is important. You might choose to work in order to stay active. But the goal here is to make work a true choice, not a necessity.
Retirement planning as a concept has a lot of moving parts. Insurance, living arrangements, health care and travel budgeting. Taxes are a surprisingly big issue, as many new retirees soon learn.
But what about investing? Here are some basic guidelines for retirement planning investments:
1. Get off the roller coaster
Stock investing is a big part of your portfolio in the early working years. It won’t disappear from your investment palette (see No. 5 below), but it should shrink in importance.
2. Find passive income
You will have access, mostly likely, to a base income from Social Security. Some folks will have a pension to fall back on for the difference.
The rest of us will need to own investments that pay a steady stream of cash, such as dividend stocks, bonds and real estate funds. That’s likely to be a big change in your way of thinking about investing.
3. Avoid fad investing
Every five to seven years, the stock market takes a deep dive. That is the recent experience, in any case. Usually, that dive is related to a single investment type that a mass of investors decides is going to be their salvation.
