Where senior citizen must invest their money?
The greatest concern of senior citizen in investing in safety. The main reason is their small income and less time to recover from financial setbacks. Senior investors must choose a good portfolio keeping in mind the risk tolerance and sufficient potential for growth. Finding the right balance between risk and returns is the key to a successful investment by them. Some of the major investment plans for senior investors are as follows:
Senior investors can purchase a fixed annuity from an insurance company which ensures you regular payment till you live. This is one of the best options provided to the senior investors who do not want to deal with the uncertainty of the stock markets and wanted to avoid risk. Fixed annuities are not insured by the FDIC and, due to inflation, the purchasing power of the fixed annuities is declining with time. Senior citizens can also buy immediate annuities which ensure future income. In exchange for some sums the company is providing guaranteed income. The guaranteed income is as strong as the company that issues it. They can also choose the term of the annuity such as 10-year pay-out, a joint life pay-out or a single life payout.
Investing in bonds also help in the growth of the portfolio of senior investors. In bond investment, you loan your money to either government, a corporation or municipality. The borrower will pay you interest for a fixed time and when the bond matures your principle is returned to you. The interest income received can be a steady source of income for senior investors. There are short term, long term and mid-term bonds from which they can choose as per their requirements. Some bonds with adjustable interest rates can be purchased which are known as floating bonds. During retirement, get 2019 medicare supplement plans and individual bonds can be used to make a bond ladder with a maturity date that suits your future goals.
Rental real estate
Renting property is also a good source of income for senior citizens. There are certain expenses needed to be looked at before buying a rental property. Senior having experience in real estate can make it a business rental real estate to make a good investment. Don’t rush in buying a rental property, you must calculate potential expenses at that time frame. Getting into real estate looking at the success of others is not a good choice.