RELATIONSHIPS, HEALTH AND MONEY

One of the big investment mistakes made by many Americans who approach retirement is to put their retirement savings in unsuitable investments. Retirement is the stage of life when the accumulation of wealth has passed. It is a time when your accumulated wealth should lead to immortality – until three or four decades ago. Some of you are tired of worrying about the financial health of the companies in which you own shares, or what will happen tomorrow to the market value of its investments. Many of you just want to be assured of a secure and predictable income for the rest of your retirement.

For those of you who have no company pension, but still want a guaranteed income that you can live with, investigate the purchase of an immediate annuity. This means entering into a contract with an insurance exchange in which you invest some of your retirement savings to guarantee that you will receive a monthly income for life. Retirees can choose from several options to ensure that they are financially secure.

If you prefer to give up guaranteed monthly income and finance your lifestyle from retirement savings, make sure you choose investments that fit your ability to afford the risk. Sometimes, the general nature of the investment may be appropriate for retirement, but the underlying assets are not. For example, a variable annuity can guarantee that if you die your heirs will pay the highest value during the life of the investment or a guaranteed minimum return, regardless of the underlying assets. These guarantees are great for the beneficiaries, but do little for you. Always ask about the underlying assets and the guarantees behind the features and benefits.

Another important consideration is the ability of investments to meet their purchasing power against inflation. While guaranteed fixed rates are easy to understand and always give you a nominal return, unless you have the opportunity to participate in overall economic growth, you may be losing ground as inflation is based on purchasing power. There is a way to gain economic growth by linking your investments to market indexes of securities, but without taking the risk of market losses.

As you age, so does the likelihood of a medical emergency. The alarming rise of the costs of health care is not likely to be impeded in the face of 76 million baby boomers moving into a higher age bracket. Four million baby boomers will reach one-year retirement age for each of the next eighteen years. This bubble population will increase the pressure on medical services and health, resulting in higher prices and less quality. This increase in price and the need for health care requires that your retirement savings must have some liquidity to manage unforeseen events.

It does not matter what age you are right now – retirement investing is a good thing to think about at any time. For tips about investment and about retirement investment strategy in particular – visit this blog.