Whether it’s you who are heading toward retirement or perhaps loved ones in your family, you should never be in a position whereby you’re just relying on a state pension. Of course, since you have worked most of your life, you’re perfectly entitled to have it, but it’s not a safety net. You should be constructing your own safety net for when you retire. It’s not just about having the kind of lifestyle you want, but managing your finances, healthcare, quality of life and desires when you’re no longer working. Since there isn’t any income you can rely on through working, you have to make sure that there is a continuous stream of incoming coming from other avenues. That’s where the real challenge of retiring comes from. How can you keep a constant flow of money coming in without actually working? Don’t worry, there are loads of options available to you, regardless of your current lifestyle and financial means.
A strong cash stream
People who have retired, will know how hard it can be to live on a small state pension because your monthly budget is decided by someone else. So, creating a strong stream of money coming in is something we all desire. Of all the options and methods available to you, it seems like renting a room in your home is by far the best option for a quick strong stream of cash coming in. Lodging is when you rent out a room, that’s in your own home. This is great as you get full control over the rent and tenancy agreement instead of handing over that power to an estate agent. Depending on the quality of your house and the room that’s offered, you could earn thousands of dollars every year.
If the room’s price is $500 a month, you would earn $6,000 a year. Coupled with your pension and other savings, this is a fantastic way to live a wealthier retirement. What young professionals are looking for is a room that’s not too far from major public transport such as a train station, good local amenities and lifestyle options. Young professionals are willing to pay high prices if they can get a brilliantly located room that’s close to their work.
Plans for the long-term
If your health has been on a steady and predictable path, then you are in luck. The long term care data shows that long-term healthcare insurance plans are better than any short-term options. This is because the premiums are not set to rise as steeply during policy shifts in politics and when there is economic turmoil. Put yourself in the shoes of an insurance company. They would rather customers buy long-term plans because it gives them security in knowing that payments will be made for a long time. They also would like customers to stay with them for longer because they can predict what kinds of healthcare you’ll need in the future. Essentially, they can look at your health records or brief medical history, and plan better for the kinds of medicine, operations and treatments you’ll use their insurance for.
Short-term plans are fraught with instability, the companies don’t know if that customer will be with them next year or whether they are just suddenly insuring themselves because they have been given a bad bill of health. It all comes down to trust and reputation, if you have shown yourself to be responsible for your own health and want to lock yourself into a long-term plan, you’re more likely to receive the best care as you age. Long-term insurances also have more affordable payment structures too, so they’ll be less money being taken out of your bank account every month.
Watch the economy
Making investments for your retirement can only be done with good care and conscious, if you’re watching the economy at large. It’s crucial that you’re reading up on financial news and how it will affect your pension. Pensions are for the most part, unfunded liabilities. If you’re in the US, it’s a good idea to do some research on unfunded pension liabilities so you know what kind of economic turmoil or growth patterns will affect them. Some people may wish to have their pension be paid to them in one lump sum because they either want all the money now for some reason, or they want to take the money and invest it. Check what kind of tax you would have to pay if you wanted to do this so you’re not caught off guard.
Investing in index funds is one of the more popular options but even then, it’s the right kind of index fund. You may find that in developed and or large economies that index funds investments are highly competitive. So don’t be afraid to look elsewhere such as in East-Asian economies like Singapore, Hong Kong, South Korea, Taiwan or Indonesia for index fund investments. In fact, since their currencies are weaker than the USD, you may in fact get more for your money in terms of funds and returns.
Develop your property
Before it comes time to retire, you may want to consider where you want to live; and how for that matter. It’s common to want to retire in a large home in the countryside. Selling the property you currently live in is therefore a most likely event. In preparation for this, you may find that extending your home and making it larger will be one of the more prudent investments you make. By adding on extra room in the attic, building a conservatory, adding a swimming pool, building a patio, decking or terrace etc, will almost double the price of your home. When it comes to retire to a home you really want, sell the property for a major return on investment.
We must all aim for a wealthier retirement. The options we have to make the wealth we desire for when we stop working, are greater than ever before. Utilize your pension lump sum to invest in growing markets abroad. Take a look at long-term health insurance plans that are cheaper than the alternative.