Investing for Your Future
It is funny but many of us get so caught up in the present we forget to plan for the future. This tends to lead to disastrous results as none of us want to be working to pay of bills for the rest of our lives! It is our entitlement to be rewarded for our hard work and to get to enjoy our retirement. By doing a bit of research and planning you can find out what strategies can be put in place to ensure you have enough money to comfortably live out your days worry free. By investing in annuities, a 401k, private pensions or property you can provide yourself with income that allows flexibility in retirement. Here is a brief overview of several different investment options that could save your retirement.
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An annuity is an investment that’s guaranteed to make your money back with interest by a pre-established time. It can take a while to find one that fits in with your needs due to the amount of fine print and stipulations attached to some but annuities are a safe investment option to increase your returns. Annuities are best suited for people living longer lives that need their money to stretch further. This makes them a suitable option for women, who on average outlive men, and middle class couples in their 50s as there is an estimated 50% chance one of them will live past ninety years old! Annuities are also a great option for people in high tax brackets as investors can defer taxes on gains from their annuity for as long as they want.
401ks are a great safe way to generate a decent sum of money for retirement. A 401k is an employer sponsored retirement fund. How it works is employees nominate how much money they want to contribute to their 401k each pay period. Then that amount comes out before the employees’ earnings are taxed. Even better, the money in your 401k remains untaxed. This allows for huge savings and more money to put towards your retirement! Many people are realising the importance of investing in the future. Many employers even offer to match contributions employees make into their 401ks in order to help provide more comfortable futures for everyone. 401ks also offer investors the choice of which sector they wish their money to be invested into allowing them more control over their money. With 401ks you have to wait until being aged fifty-nine and a half before withdrawing money without a ten percent penalty. Despite this 401ks are still a reliable way to make sure your earnings don’t suffer too much from taxes and you provide for your future.
Private Pensions/ Company Pension Plans
Private pensions are pensions that are set up by your employer to provide you with finances upon retirement. Usually these take the form of an agree upon contribution the employer will deposit into the employees’ pension. The pension in turn can be accessed by the employee upon retirement either as a lump sum or set payments. Pensions can come with several benefits depending on which schemes your employer has in place. For instance, pension schemes can provide benefits or payouts to families that have lost a loved one in service or to your dependents when you die after retiring. Pension benefits are usually portable and won’t be frozen when your job status changes. Check with your employer to find out if there are any schemes you are eligible to join. You may be missing out on perks at your job!
A good fail safe to consider for your retirement investments is property. Property investments are becoming increasingly popular as they help people get a bit of extra money, especially for people that may not have previously invested much. If you’re willing to shop around for the right home, you can make a decent amount from renting it out. Good options could be either a bit of a fixer upper that you can work on yourself, or perhaps somewhere cheap that’s close to public transport or the city. A downside to this though is that many lenders may charge an extra fee if you’re purchasing the home and not the primary occupant. A way around this however, if you’re comfortable with it or simply enjoy the company of others you could rent out a room, or granny flat if you already have one, in your own home. Property investment also offer some tax breaks in that you can claim for depreciating value. If you think you may want to sell down the track though consider this carefully as sellers can be lumped with a large bill depending on how profitable the sale is.
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At the end of the day though no matter which route you take on your investment journey it is important for you to start saving now! It doesn’t matter how old you are if you have a regular income you should research your investment options and find a plan that best fits your wants and needs. With the range of options from annuities, 401Ks, private pensions and property there is bound to be a plan that fits into your vision of the future. Remember when looking at potential employers, enquire into their policies on retirement plans and which pension benefit schemes they offer. The earlier age you get involved in your future and take investments seriously the longer more rewarding retirement lifestyle you will be able to enjoy in your later years. It is never too late, do the research and invest in your future today.