The moment you realize that you are about to retire, your investment goal starts to shift from investment growth to finding ways on how you’ll save some money for your upkeep after retirement.
Below are 6 low-risk investment to get a steady and consistent return on your investment:
1. Real Estate
Real estate can be your perfect match if you are willing to manage it on your own or subcontract a company to manage it on your behalf. Though some people may think that borrowing to acquire rental properties is the best alternative, which is wrong. This is wrong because debt increases the risk on your rental property because the loans will always require servicing. So, forget about mortgage and own the rental property on your own if you want to generate profit.
2. Bond Funds
If you want broadly diversified bonds, then you’ll have to purchase an exchange-traded fund or a bond mutual fund. The advantage is that you have a variety of bond funds you can choose from like government or corporate bonds, long-term or short term, domestic or international. The main aim of bond index funds is to make equal the returns indexes which include, Bloomberg, Aggregate Bond Index. Therefore, if you go for a large diversified bond fund, you are likely to live a more comfortable life after your retirement.
3. A Bond Ladder
This is one of the best strategies that retirees who want to reduce their bond interest rates can take. The hack with this is to buy a variety of bonds that have different maturities to ensure a predictable income. And when the bonds that you have invested on matures, you can either reinvest them or use them for your expenses. Because the main aim of a bond ladder is to reduce risk, you can reinvest your matured bond your interest rates have risen. But then, if the interest rates had fallen, your bonds will continue to generate more income
4. A High-Yield Savings Account
One of the best ways to put your money safe is by saving your money in a savings account.
But here is the insight; traditional brick-and-mortar banks have low rates. So, don’t put your money there. Instead, have a target to put more fixed deposits to attract higher interest rates. You can also calculate on fd calculator to calculate your fixed deposit potential earnings.
The good news though is that you can get higher interest rates from online banks, which have lower costs of operation.
In case you are using the online bank, you can transfer your money manually and the transfers take two to three business days to move from checking to saving.
5. Municipal Bonds
Municipal bonds are issued by the government of counties or states. Their main aim is to provide security to the debts you owe other people.
If you are serious about reducing your portfolio risk, then you will need to geographically diversify municipal bonds with different maturity dates.
The best of all is that these types of bonds are exempt from the federal taxes, thus helping lower your taxes.
6. Time Investment
If you need to generate more money and save it, then you should consider having a part time job. A part-time job will generate you more income that you can save for future use after your retirement. A better part-time job is freelancing. You can set up a freelance business and be hired to write or do other stuff for companies that need your services.
Ultimately, you will have to retire. The honest truth is that you won’t have your full-time job forever. Therefore, find the best hack from the above and implement. It will save you.