Have you ever wondered how you can invest without huge risks even as a retiree?
With how fast inflation has hit our nation, a lot of people are looking at both their finances and investments and thinking about whether or not they made the right decision.
A study conducted in March 2022 by the Nationwide Retirement Institute has discovered that a great portion of the American population has been rethinking the way in which they are living and how they are spending their money. In fact, about 13% of the people who are eligible for retirement in a few years have already stated that they plan to put it off due to not knowing if the situation and sudden inflation rise would allow them to live comfortably.
Maybe retirement is knocking on your door, or maybe you are still a few years away from it, or maybe you are already retired and want to know how to make sure you’re not going to go through your retirement savings in the blink of an eye. We have gathered all the best investments you can make before your retirement (or even during it) that are going to help you protect your retirement fund.
After all, wishing for the best outcome doesn’t guarantee it, so you should take all the steps needed to protect yourself and your family! Let us know if you plan to make any more investments or if you have already made any of these investments!
1. Get rid of your monthly mortgage payments!
This may not sound like an investment but believe us, you will want to make sure you don’t end up retiring with a huge mortgage. According to a Harvard study, a lot of people who start their retirement years with such payments end up being burdened by the cost and spending more than 30% of their income on housing! In the grand scheme of things, it may not sound like a lot, but when you put it into perspective, it may seem daunting.
After all, about a third of all your retirement savings will be spent on housing, leaving only about 70% of the rest to cover everything else. For some, it may mean that besides their basic needs, the reserves won’t cover much else. This is why you should make sure you get rid of those payments, or make do with them, so you can enjoy your retirement years rather than it seeming like something to endure.
There are a lot of options for that: either looking into paying it off, if you can afford it, beforehand; or looking into getting a reverse mortgage. It may seem daunting, but since most of us have children with established careers and houses of our own, there’s no need to think about leaving the house in the family.
Since most of us buy houses as our forever homes, you can use the reserve mortgage to make the best of your life: the bank will pay off your note and then give you a chunk of the proceeds so you can use them however you see fit. You still retain the right to the house, as it is still yours until you eventually pass away or move somewhere else. That way, you can just take the stress of the mortgage off your shoulders and just enjoy your retirement years.
2. You should invest in gold or silver! Or both!
We all know how our money gets impacted by inflation and other big incidents around the world, so no matter how secure you think your savings are, they actually do decrease in value over time. It’s not really that your investments aren’t going to be enough, but rather that the dollar will decrease in value over time, and if you take a careful look at your 401(k) balance, what seemed to be enough a few years ago may not even scratch the surface when you end up retiring.
This is why you should look into diversifying your portfolio with investments in silver or gold! And we don’t mean jewelry here, as these precious metals have been used to make parts for modern electronics. Do you see anyone giving up their smartphone these days? If anything, we have all become a little bit dependent on modern technology, and in a few years, we think the situation will be the same.
Not only that, but you can invest in gold coins, gold bars, or invest in a “gold IRA”. The physical precious metal will not decrease in value; it will actually increase over time, most probably, and in worst-case scenarios, it will just preserve its value from the time you have acquired them. Not to mention, the Internal Revenue Service regulations oversee the “gold IRA” investment, and you don’t have to worry about them devaluing over time.
Some food for thought when you decide to diversify!
3. Don’t rely only on Medicaid, protect yourself today!
We all hope that our retirement life will find us healthy, vibrant, and active in whatever way we can, given our age. That we will continue to live our lives to the best of our ability, mobile and happy until our time comes.
But the sad reality is that things don’t always go as we planned, and the United States Department of Health and Human Services has found that almost 7 in 10 people who turn 65 years old every day will most likely need medical care long-term.
And while Medicaid will help you with your hospital issues, it doesn’t cover long-term care that generally involves custodial care: normal things that you don’t think about like dressing, cooking, light housework, shopping, bathing, and other menial tasks most of us don’t ever imagine we may need help with. Yet, you never know when tragedy can strike or when your body will tell you that you need to take things slower.
This is why you should look for insurance that covers such long-term care or that will help you cover such expenses, so you don’t end up covering everything out of pocket. Not only that but even if you think that you can cover things out of pocket, your retirement savings may not even cover such costs completely and you risk losing your independence.
Why not make sure your insurance covers these things beforehand? Despite having to invest a little bit more in your life insurance, you will find that it is all worth it rather than live in uncertainty once you realize that such care is a must during your retirement years.
If you wish to make the most of Medicaid, we recommend that you read as much as you can on the topic ahead of retirement. This book you can find on Amazon will help you understand Medicaid and aid you in the process of getting it!
4. Curb the future worry about household repairs now!
Let’s be honest, we all hope that nothing in our houses will break, and some even live with this hope! However, that is far from the truth, and when we have to do those home repairs, the bills generally stack up pretty fast. After all, we want the best repairs for our property, both so we know it won’t happen again and to be sure it won’t happen again that fast.
But no matter whether it’s a broken appliance or a break in the roof, it can very easily turn into a nightmare and potentially cost you a fortune to repair. We won’t mention replacing whatever needs repairing completely because that can jump to thousands in a heartbeat.
This is why you should always invest in a home warranty that will cover anything in your house. From little things like home appliance repairs to the biggest problems such as heating or cooling systems and plumbing, there are warranties that will cover everything. Sure, some may see it as an unnecessary expense, but when all you have to do is call the company and they will take care of everything from hiring a technician to handling pay, you will see it was more than worth it.
Be one of the wise homeowners, not one of the unnecessarily frugal ones, and ensure your home right away!
5. Don’t let your old car rack up your debt with repairs!
We all love the way in which cars have evolved over the years, and some of the new features are amazing, especially with the integrated GPS and the fact that you don’t have to suffer the heat inside the car. However, one of the things that we don’t love is how much the basic repairs on a car have become so much more expensive! A repair shop claimed that compared to 10 years ago, the average price for a repair went from $1,600 to $4,000!
That’s a lot of money. And if you think you’re covered because your car isn’t that old yet, think about the fact that it will be considered old one day. And since most average drivers keep a car for up to 12 years (since there’s no need to invest in a new one if your old one works just fine), at some point, you may end up being served a repair bill in the thousands! This is because the warranty on most cards expires after three years.
You should definitely look to invest in a vehicle service contract (one that you will probably have to renew every 36 months). This will make sure that no matter how old your car is, you will be covered for most of the payments a repair may need, together with free towing systems! Not to mention tire coverage and help if your car breaks down, as some companies will pay your repair costs completely and you’re entitled to deductibles!
Just read those contracts carefully, and you’re set to go!
6. Invest and diversify your portfolio with real estate!
We left this one for last because we know people are most likely a bit tired of hearing this: but we cannot exclude it! Whether you are set to retire in the next few years or you are already retired, the best way to make your investment make your money back constantly is to invest in real estate. This is also how you can make sure your money will not decrease in value over time (especially if you pay a fair price and then upgrade the property).
It’s a universal truth that real estate will not only diversify your portfolio but it will also bring you a profit if you rent it out. If you have some money lying around, why not buy a property instead of hoarding it into a bank account where they devalue over time? It’s the easiest way you can not only invest but also make money back afterward when you rent it out.
Not only that but with how society has evolved over the years, you don’t have to deal with the hassle of being a landlord anymore! You can get a company to help you, and they will be responsible for not only finding the best tenant for your property but also dealing with all the paperwork, any repairs, and keeping in contact with the tenant.
This will save you a lot of time, and for generally a part of the rent money, it’s the easiest way to both get a return on your invested money and also make sure you’re not losing money in the long term.
If things take a turn for the worse over the years, you can always sell the property!
If you don’t have that kind of money around to be buying whole properties, there are companies that let you buy fractions of properties that they have lent to big showrooms and stores. It’s sort of like you’re buying parts of stock but on a property. It’s something new, but most people do see an annual return of over 20%. So it’s definitely worth looking into.
And if you’re worried about how high the expenses will be in retirement and that your investments are not going to cut it anymore, make sure that you read all about the best places in which you can move with only 45k a year!