Most people think about retirement as a means to enjoy their life after serving the workforce all their lives. However, others see it as an opportunity to grow the retirement savings they get from working a full-time job for many years. But as soon as their career ends as intended, are there still ways to make their retirement savings work in their favor? Here are other investment options for retirees.
1. Leave Retirement Savings Invested Longer
Investment returns look better the longer you wait to cash out on them. If you already have a retirement savings plan, you might want to leave your money there longer instead of withdrawing from it. It is also a way to let it grow rather than start from it. After all, your money is not going anywhere.
Further, you can invest in annuities. It can be a good option as you will still get your money back when you retire. However, this takes time, and you should not expect to get your money back immediately. The annuity value is not that big, so you do not want to withdraw your money from your retirement savings.
2. Add Retirement Savings to Superannuation
If you had an account in superannuation, you could use the retirement savings to boost it. For instance, you can allocate part of the fund specifically for investment. You can also take advantage of a retirement savings plan which offers an annual contribution of up to 9.5% for people aged 50 to 59 and 15% for those aged 60 to 64.
Your superannuation will be able to accommodate the additional funds. The money you allocate in your superannuation will be used for different purposes. The funds will be invested in various funds, and you will be able to get your money back when you retire.
3. Downsizer Contributions
Retirees can also contribute to their superannuation when they receive downsizer contributions. These are a form of proceeds from the sale of the property. You can claim the capital gains tax and contribute to your superannuation when you sell your home. As a result, it should accommodate the addition of your downsizer contributions.
4. Eliminating Existing Debt
Debt is a massive problem for retirees. It would be best to get rid of it before using your money for something worthwhile. You should also have a debt management plan to become debt-free. It would be best to get out of debt by eliminating credit card debt. You might want to pay off your mortgage too. The money you will be able to save can be put into retirement savings.
5. Build an Emergency Fund
Your retirement savings should be used for emergencies, but you do not want to rely too much on these plans. You always want to keep your emergency fund on standby. However, it would be best if you still had retirement savings to plan to fund your emergency fund.
The emergency fund is there to help you avoid bankruptcy if you need it. The emergency fund should be big enough to support your household expenses, repair your car, pay for hospital expenses, etc. You should be able to rely on your emergency fund in the event of a sudden situation.
While you may have already retired, that does not mean that your finances should not be taken care of. It is essential to choose the right investment option for your retirement savings. Otherwise, you may end up with nothing to use when you get older.
Central Coast Financial Planning Group offers investment planning services on the Central Coast. Our goal is to provide financial advice to retirees or people who would like to learn more about investing their money’s worth somewhere they could benefit from. Make your money work for you by investing your retirement savings today and seeking assistance from us.
DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Coastal Advice Port Macquarie and Coastal Advice Ballina Byron are subsidiaries of Coastal Advice Group Pty Ltd which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.