Your life as a retiree is only as good as you plan for it to be, and it all starts much earlier than you would think. Though some people benefit from an employer-based pension, like a 401(k), others need to take a more proactive approach to their retirement savings. This usually involves saving in a tax-free savings account like an IRA in the USA, or an RRSP in Canada. However, some will have already learned that though they are relatively safe investments, they are no guarantee of security nor are they primed to make you extremely comfortable when the time comes to throw in the towel.
That’s why some people decide to take their retirement investments into their own hands entirely and make decisions which they believe will bring them better results. Here are some alternative ideas for investing into your own future retirement:
- Real Estate
Those who had invested massively into real estate before the 2008 real estate crash might be a bit sceptic about getting involved in the market again. However, if you buy a home in a safe and reliable location, you will see that the market is rebounding and the prices are climbing again, albeit more slowly. Instead of buying as many properties as possible, smart investors are purchasing one or two small rental buildings with 2-3 units, known as duplexes or triplexes, and using the monthly rent to pay off the mortgage. Once they hit retirement and the mortgage is paid off, they can either decide to continue renting out the units, or sell the building and cash in the equity for a bonus. Make sure to talk to a tax advisor about the smartest option for you before you withdraw.
- Investment Portfolio
Stocks and market investments have always been a popular choice for those looking to pad their nest for retirement. However, most experts would agree that the closer you get to your retirement, the less involved you should be in volatile and risky stocks, and instead diversify your portfolio and lower your risk to protect what you have invested and gained up to this point. If you are looking to stay in the investment game, we advise you to look for market investing advice and stock recommendations from a trusted name in the business. Otherwise this can become a game with great stakes in which you can either win or lose. And at this point, losing isn’t something that you want to be doing.
- Looking Beyond the Borders
If there is no need for you to retire in the same place you live right now, you might consider looking beyond the borders of your state or country for investment opportunities. Buying a home or condo in the Dominican Republic, Costa Rica, or even a country like Poland or Croatia might seem strange now, but could really be a stroke of foresight later. These countries still have land and properties available to North Americans at a bargain price, along with increasingly high standards of living. If you invest now, you can rent it out until you are ready to move, and then with your North American pension and savings, you can move to a location with lower living costs but beautiful scenery. If plans change, you can always sell that foreign investment and recoup your costs plus the additional market value.
If your 401(k) and your IRA just aren’t doing it for you, and you feel that for your own security you need some other way to invest your savings in order to have a comfortable retirement, look around you. There are many ideas which can bring you profit without drastically increasing your risk and threatening the retirement lifestyle which you have dreamt for yourself.