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Highlights
- Retirement can directly impact your monthly income.
- Thus, it requires astute preparations in ensuring the emotional and financial security of a person.
- Retirement planning becomes more important in uncertain and inflation-hit times.
Retirement can easily be termed as one of the most challenging phases in lives of working people since it directly impacts your income. As a result, it requires wise preparations in ensuring the emotional and financial security of a person. Responsibilities and liabilities such as loan EMIs, and insurance premiums have to be factored in while preparing a strategy for retirement. Thus, planning becomes more important in uncertain and inflation-hit times.
Here are five simple tips to boost your retirement income:
Purchase an immediate annuity
Retirees are advised to buy an immediate annuity plan at the earliest. It is seen as an easy way to convert a lump-sum amount into an income stream that begins almost immediately. The best thing about these plans is that they are predictable and not affected by dipping stock prices or falling interest rates. However, you must also know that once you buy an immediate annuity plan, you cannot change your mind since the principal is locked in forever.
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Stocks
While retirees should ideally allocate a lower amount of their savings towards equities, successful portfolios have been seen to include stocks and real estate when they were in the growth phase. However, this may require serious efforts and sound strategy, which may not be an easy play. You can employ advisors if you can afford it.
Stocks not only have a history to give higher returns over the time compared to other asset classes but they also provide a hedge against inflation.
Laddered bonds
Have you heard about bond ladders? Well, these are created through the purchase of multiple bonds that mature at staggered intervals. Bond ladders are known to provide consistent returns. They also carry a low risk of loss and offer protection from call risk as staggered maturities remove the risk of all the bonds being called at the same time.
Diversification is important
Diversification can also play a key role for retirees.
Retirees can also include a pension, social security benefits, an inheritance, real estate, or other income-generating investments in their portfolios.
Robo advisors
There are several choices currently in front of investors when it comes to successfully managing retirement funds. One of these choices is active versus passive portfolio management. The latest in the game is the use of a robo-advisor to manage investment portfolios. The digital platform manages a portfolio as per the preset algorithms triggered by market actions.
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