Five Underlooked Investments for Retirees

by Kaylie Phelps

When it comes to investing strategy, your age should be counted as one of the most important factors in forming the way you approach building a portfolio. While younger investors still have a salary that allows them to recover from more risky ventures in the stock market, older individuals or the recently retired need to tailor their allocation of stocks in a diversified way.

Ideally, this would look like a combination of companies that have above market average dividend return. But not everyone is savvy enough with todays markets to hit this golden combination on their own. That is why we have compiled a guide of these five under-looked strategies and assets that best suit the retired investor.

Consider Moderate Changes –

If you already have a portfolio before retiring, it is not always necessary to make big changes to the stock listing that you are currently in. For those first years of a hopefully long retirement, it is wise to make small adjustments, amounting to perhaps a 5-10 percent change in holdings. For example, if you plan to withdraw a moderate amount of your savings each year, say 3-5%, then adjusting for inflation you should be able to maintain your balance with a standard low risk portfolio. This should keep your initial years as stress free and gilded as possible. Consider the major and most important costs first such as dental senior insurance and then subsequently more luxurious ones.

Credit Investments –

Corporate bonds are one of the best-kept secrets in the retirement investment world. Most retired investors only consider stocks and equities. These credit investment products, when purchased through an intermediary such as an investment bank or hedge fund, offer the passive investor a relatively lower risk option to the more volatile equities markets. Some of these bonds can return as much as 12% a quarter, making the investor who helps fund these firms a handsome profit even after the rather expensive service fees.

Diversified Wealth Managers –

Rather than stressing while you should be enjoying your retired life, consider hiring a team of professionals to allocate your funds for you. There are many wealth managers today that specialize in low-risk sustainable investments designed to accomplish retirement plans. When speaking with wealth managers, ask for a reasonable blend of stocks and bonds that match your unique tolerance for risk and life plan.

Diversify Broadly –

Diversifying means more than just investing in both Stocks and Bonds and many companies and industries. Your diversification should consider factors such as quality grade of the investment, age of industry in which you invest, low risk and high risk. This strategy will cover your bases in the case of a financial crisis because these downturns rarely affect the young and old companies in the same way.

Index Funds –

U.S stocks and bond market index funds are the easiest way to achieve the type of diversification that allows retirees to thrive in all types of market climates. You will tap into a part of most of the companies that are traded publicly with ease. Many long time retired investors have nearly double and tripled their nest egg via this conservative method.

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Save Money On Your Mortgage

by Kaylie Phelps

Finding little ways to save money on everyday expenses is super important for financial well-being. However, when it comes to the biggest expense in the budget, people sometimes get lazy with their frugality. Fortunately, it’s easy to cut out a lot from your budget simply by saving money on your mortgage.

Home Refinancing

The most automatic way to save money on your mortgage is to refinance your mortgage. The easiest way to explain what a mortgage refinance is is to imagine that you’re canceling your original mortgage and getting a new one at a lower interest rate. Usually people will go to a new lender to get a better interest rate, perhaps even an international lender like STK Finans.

Obviously refinancing a mortgage isn’t free – fees can run in the hundreds or thousands of dollars, depending on how large the balance is. However, once you’ve refinanced, the lower interest rate automatically begins to save you money. Plus, when you’re getting the new mortgage, you can shorten the term of the loan to save even more!

Find a Roommate

The most difficult, but most lucrative means of saving money on your mortgage is to get a roommate. The roommate can either rent out a room in your home or, if you’ve got a bigger property with a separate entrance you can create an income property. Sure this involved slightly higher gas and energy bills but once you find the right tenant, you have a viable, long-term income stream.

Rent prices vary but Separate income properties or room rentals can bring in anywhere from a few hundred to a couple of thousand of dollars a month depending on the size of the space and the neighbourhood. This money can be collected and used to make lump sum payments on your mortgage.

Lump Sum Payments

Lump sum payments are a flexible way to lower your mortgage balance. Most mortgages have a clause in them that allow borrowers to pay a certain percentage of the money owed in a lump sum payment each year. Since the cost of borrowing is directly related to that amount of money you owe your lender, lowering your balance immediately saves you a bit of money.

It’s hard to get ahead in today’s world. Finding any way you can to save on your mortgage is invaluable to leading a good life and having money for vacations and retirement.

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