Safe is good. Particularly, as we mature to our golden years, we want more comfort, safety and good health. Safest retirement investment means what is at risk with them, how to find them and most importantly, what is your risk tolerance.
The main purpose in the safest retirement investment is to your principal. The next safest retirement investment purpose is to provide interest income. Even though you want to have a safe investment, safest retirement investment has risk to them. For example, there are three:
*Loss of principalprotect
*Loss of purchasing power (depending how long you tie your principal up), due to inflation.
*Risk of liquidity. Needing your funds before maturity of your investment and having to pay penalties or early withdrawal fees.
Rule of thumb, sort of speak, is to keep three to six months of living expenses on hand depending on how secure your job is. Most people only have approximately two weeks on hand. The closer you get to retiring, safest retirement investments should be foremost for your portfolio.
To find safest retirement investments should include guaranteed principal. Where will you find such an investment? Social Security,
pension plans, savings accounts, c.d.’s (certificate of deposits),
government investing (treasuries, bonds), and annuities. Most investors exhibit poor judgment when it comes to pouring money into equities (stocks and mutual funds). Why? Very simply put, emotions.
For twenty years ending 2008, a survey of the S&P Index showed that the average return per year was 8.35. Could you take the roll-a-coaster ride of the stock market? The study shows that investors pull their money out when the market drops. They continually buy high and sell low by chasing what is called ‘trends’. This is irrational behavior to human reactions. Never sell equities in a down market.
Be brave and stay strong.
Now, that being said, safest retirement investments is in the science.
You’ve heard the expression, ‘they have it down to a science’. It’s proven academically that a disciplined approach to investing will give you higher returns. Many banks now have an investment department which houses brokers. Check with your bank. It can be a third party investment firm. These brokers can purchase a C.D. anywhere in the country in addition to bonds and annuities. See if you can do this yourself online with reputable companies (do your homework) to save commissions. In your quest for safest retirement investments, as with any investment, consult a financial specialist such as a CPA, accountant or tax attorney.
Ric Dalberri is a graduate of Columbia State University & has been involved in his own business (sold) employing over 100 people. As
well as being a top producer as a Financial Specialist for over a decade with one of the largest financial institutions in the U.S., Ric has many years experience in sales and management. Ric was also a mentor in
the financial arena as well as a volunteer teacher for Junior Achievement.
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