Nov 2022
5 mins read

4 Tips to Plan your investments for a fulfilling retirement

The nature of your financial goal planning changes in retirement. Before retirement, the emphasis would have been on building a sufficient retirement corpus, while saving heavily and deferring expenses. Now, you may no longer receive a fixed income, but you finally have time to pursue the hobbies you have been putting off all these years. With proper investment planning, you can achieve your goals, manage your expenses and finances and truly enjoy retired life. You should continue to invest in options like mutual funds so that you don’t just rely on your savings, but make your money work for you. At the same time, opt for instruments that minimise risks, offer stable returns and keep your funds secure. Here are four ways to balance financial growth and security for a fulfilling retirement:

Lay the foundation for healthy, long-term returns

Cash savings may seem safe, but growth opportunities in the long-term are very limited. Evaluate your risk appetite and embrace a certain level of capital risk to pursue investment options that generate long-term returns. This will give you financial breathing space to manage your expenses and enjoy your hobbies in retirement.

point 1

Be mindful of inflation

For your savings to grow, you must earn a rate of return after tax that is higher than the rate of inflation. Savings accounts may not be able to meet that need as they offer a low rate of interest. But with the right investments, you can certainly earn returns that outpace inflation and create wealth, allowing you to spend more freely.

point 2

Seek consistent income

Having a regular income is a good way to keep your finances healthy and moderate your spending. You may lack the same level of regular income in retirement, the way you did in your working life. What you can do instead is channel the returns from your investments into a steady flow of earnings. Focus on investments such as equities, bonds, or property that offer healthy, consistent returns. 

point 3

Customise your investments to your needs

Your investments should be aligned with your post-retirement goals and activities. Look at the lifestyle and pursuits you would like to take up, and determine how much money you will need, and how frequently. This will help you determine the type of investments basis their tenure, risk and returns. 

point 4
Thorough post-retirement financial and investment planning will give you the freedom to pursue leisure activities and hobbies. Keep evaluating your goals and investments regularly, and tweak them over time. For instance, if your goals are long-term, equity investing is a great way to pursue them. As you get closer to your goals, you may switch to fixed-income instruments. Consult your financial advisor to help you select the most suitable investment route for every need, and let your money work for you.
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