With the recent financial collapse on the world markets it is now more important than ever to think about retirement plans and to ensure that the money that you have is invested wisely. Of course for many people there has always been the temptation to metaphorically stuff it under the mattress and to hope that everything will be OK.
Unfortunately given the recent world banking crisis many more people will be thinking that is a sensible option and whilst it is understandable, it could be considered unwise. It is really important that people looking at retirement should make adequate plans to ensure that their money is looked after wisely and most importantly they get advice on how to do that from people who are independent.
In reflecting on what to do with your money it is important to make sure that attention is paid to a few key areas. The most vital part of that is review what is needed day to day to make sure that money is available to give you a good standard of living during your retirement. That means that you will have to be very clear about what your living costs are and what your goals are for your retirement.
This way you can look at your money and ensure that it is used effectively to give you a good lifestyle. At this point a picture can be drawn about what you would like to invest and just as importantly what you’re ‘risk appetite’ is.
Risk appetite is a very personal thing and younger people can obviously be a bit more blasé about this; but for those thinking about retirement it is vital that a good understanding on how risky individual investments are before any decisions are made.. Most independent advisors would look at a retirement as a time to be a little risk adverse and to look at spreading the risks across a wide range of investments.
In order to do that it is important that advice is sought if there is a lack of certainty about the risks involved. As an example property investments have in the past been seen as relatively safe but given the volatility of recent years this level of risk cannot be taken for granted. Gilts and bonds are a safer way of investment but obviously there is a limited amount of growth to be gained from such investments.
Obviously the trading prices of such products can be volatile, but it might be better than a straight forward savings account where your money’s value can be eroded by high inflation. This is especially important in times such as these, where interest rates are low.
There are options to invest in stocks and share and that has to be approached with care especially with retirement planning. Shares values can be volatile and many advisors will strongly advise anyone looking to invest to spread their risk and to ensure that investment should be in a fund rather than an individual company. Even investing in a fund requires some research because investment funds have different risk profiles and caution needs to be taken to choose the right fund to suit your goals.
There are other investments such as art or gold but these are much more niche investment opportunities and it would be better to consult and expert before making such a decision.
These different ways of investment or asset classes all carry advantages and risks and it should be a priority for anyone investing their retirement money to ensure that they are informed about all of the facts. This will help make sure that any retirement plans are not put at risk by volatile markets. Most independent advisors would agree that diversification is the key to worry free retirement and peace of mind.
Nigel Walters is a very experienced blogger, who aims most of his articles on investment; his interests are the stock market, investments and the property market. He blogs for a number of different companies and bloggers such as innovo property UK.