7 Ways on How to Invest For Your Retirement
Investment Plan for Your Retirement
There so many investment plans obtainable out there. The following points will guide you to choose the most appropriate one for you with lesser risks and commitments to manage. The points are based on the fact that, after a while they are going to be appreciating business ventures for your retirement.
Annuity is a plan whereby an insurance company in exchange for buy price enters into a contract to pay an agreed amount of money every year while the annuitant is nevertheless alive.
Annuitant- is the person on whose life the contract depends.
Annuity- is the amount of money paid to the annuitant.
The benefits of an annuity especially when used in connection with retirement provision is that it would ensure that the retiree has an income for a functional number of years. The best kind of annuity is deferred annuity because it gives you life time benefits.
A bond is a loan to either a government or a corporation, whereby the borrower agrees to pay a fixed sum of interest usually semi-yearly, until your investment in complete. Treasury bonds are obtain, medium to long-term investments that typically offer you moment payment every six months throughout the bond maturity. Treasury bonds have a fixed rate meaning that the interest rate determined at auction is locked in for the complete life of the bond. This makes treasury bonds predictable, long term source of income.
3. Exchange Traded Funds (ETFs)
Exchange traded fund is an investment fund traded on stock exchanges just like stocks. An ETF holds assets such as stocks, oil future, foreign money, commodities or bonds and generally operates with an arbitrage mechanism to keep its trading close to its net asset value, although deviations can sometimes occur. These assets are divided into shares where shareholders do not directly own or have direct claim to the investments in the fund.
ETF shareholders are entitled to a proportion of the profits such as earned interest or dividends paid.
In Kenya the main stock market is Nairobi Stock Exchange (NSE). A stock market is a place where public limited companies and other financial institutions, come to buy and sell bonds and other derivatives. NSE acts as a third-party broker and allows investors to buy and sell shares independently by proportion dealing platforms. You can directly and indirectly invest in stocks. Direct investment method that you buy shares from a company and become a shareholder while indirect method you invest in more than one company consequently spreading the risk. Indirect investment is done by an open-ended fund and the money is obtain so that already the company defaults the money is nevertheless safe.
5. Mutual Funds
Mutual funds are some of the most overlooked in addition probably the easiest way to invest much more than both stocks and bonds. A mutual fund is a pool of money, often from similar minded investors. You can sell your shares when and if you want. All shareholders of the fund assistance from the fund and proportion in any losses. There are five categories of mutual funds where you can choose the one which best suits you.
6. Real Estate
Real estate is a retirement investment plan you should never overlook. Landon said ‘look for what’s going to give you the most bang for your back’. Real estate as a front is a very lucrative opening. However, one must research the market and know the current and emerging trends in the sector. The location of the real estate matters a lot and should be well chosen. Some of the major locations can be near universities, developing towns or big company sites. In any investment capital becomes the main organ to jump start the investment. Research on different financial organizations and try to compare their payment and funding terms. You can nevertheless opt to become a Real Estate Trader. A real estate trader is one who buys character with the intention of holding them for a short period and sell to make a profit.
7. Pension Plan
Pension plan is a retirement plan that requires an employer to make contributions into a pool of funds aside for a worker’s future assistance. The pool of funds is invested on the employee’s behalf, and the earnings on the investment given to the worker upon retirement. In Kenya already self-employed workers can nevertheless contribute to the social security fund to help them when time comes.
Retirement is a course of action where every living worker must come to terms to. Retirement is just like any other investment but a more crucial one since when you retire you productivity goes low due to health and age. You can start now and by the time you retire have meaningful benefits that can help you live a befitting like after retirement. Take a step today and plan to invest for your retirement now and be a happy retired worker living a good life and building the economy already at old age.