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How do I Choose the Best Retirement Investment?

Article Details
  • Written By: Felicia Dye
  • Edited By: Jenn Walker
  • Last Modified Date: 21 April 2019
  • Copyright Protected:
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    Conjecture Corporation
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The chances of being financially secure after you retire is likely to be based on the quality of the decisions that you make while you are still working. When trying to choose the best retirement investment plan, some considerations may include your age, how much money you have already saved, and how much money you have to invest. If you are currently employed and there is a 401k plan offered, you should carefully review it before rejecting it for other options. Do not feel, however, that if you do not have access to a 401k or if you do not find your company's plan satisfactory that you are without other options.

When trying to choose the best retirement investment, you must consider your age and the amount of resources that you already have put aside. For example, a person who is approaching retirement in the next few years will need a more aggressive investment strategy than a 21-year-old if he has done little saving and investing. People who are close to retirement and who have already accumulated a significant number of financial assets may find it most beneficial to begin investing in low-risk assets such as bonds.

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Another thing that you may need to consider before exploring options, however, is how much money you have to invest. The best retirement investment for your situation may be beyond your reach due to your financial obligations or spending habits. If you are serious about securing your future, you may need to eliminate some of your debt and outline a stricter budget so you can broaden your options.

If you have a job that offers you the opportunity to participate in a 401k plan, that may be a great retirement investment vehicle for you. This is especially true if you review the plan options and find them favorable. Another benefit to investing in this manner is that your employer may be willing to match your investments fully or on a percentage basis. If so, remember that the funds that your employer contributes are like free money for your future.

Do not worry if you do not have the opportunity to enroll in a 401k plan. There are other suitable means of investing for your retirement. Individual Retirement Accounts (IRAs), are an example. If you are approaching retirement and you only have a limited number of assets, this is not likely to be your best option. An IRA is subject to contribution limits which restrict how much money you can invest. You may not, therefore, have enough time to reap the necessary benefits of an IRA.

Another important factor in choosing the best retirement investment strategy is to take the time to get educated. There may be more options available than you realize. Even if they are brought to your attention, you need to understand the operation, level of risk, and advantages of any type of investment that you consider.

One of the best tips for choosing the most suitable retirement investment strategy is to seek advice from a professional. You may be tempted to underestimate the value of the services provided by financial advisers, but their advice can be beneficial — especially if you're not financially savvy. Professional planning can impact the amount of money that you invest, earn, and pay out in taxes, and advisors can help you understand how that works.

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