Jeremy Moran
While you might be able to build the retirement corpus you want, it is important to invest this money in order to gain more returns. There are various investment options that you can choose to invest your retirement money. However, there are a few things you should consider when investing your retirement corpus.
If you want to know how to invest your retirement money, then read this article.
Most people try to build a corpus that can help pay for their regular expenses, meet their goals, and live a stress-free life after retirement. Therefore, many invest in different investment options, such as online pension plans. With the help of these investments, they might be able to accumulate a corpus that can help with their expenses. However, there are a lot of people who want to invest their retirement corpus to earn more returns. But what is the strategy to follow to invest retirement money?
There are many investment instruments that you can select. However, you should keep in mind a few things before investing your retirement money.
Here are the factors you should consider-
- Know Your Risk Appetite
The risk appetite of retirees will change. For instance, a person who is working might have a higher-risk appetite and he/she might invest in stocks. This might not be possible for retirees. Thus, it is essential to know the risk appetite when looking for investment options.
- Keep Track of Inflation
Inflation is constantly rising. It is another risk that might trouble retirees. Therefore, to ensure the money doesn’t lose value, retirees can invest in equities. While equities might be a high-risk option, they can provide returns that can tackle inflation.
- Break Retirement Into Five-Year Segments
It is wise to divide retirement into five-year segments, such as age 60-65 years, 65-70 years, etc. This is because the investment strategy might differ based on the requirements a person has in that segment. Hence, by breaking retirement into segments, a retiree can pick the right investment instruments.
Investment Options to Invest Your Retirement Money
- Stocks
Investing in stocks can be very risky. However, to tackle inflation and earn good returns, stocks are a better option. But this option is recommended for people who can take higher risk. This is because it is possible to lose money in the stock market.
- Mutual Funds
Mutual funds are one of the best investment options that people can opt for. Primarily, mutual funds are available in two types- equity and debt mutual funds.
While equity mutual funds invest in stock markets, debt mutual funds invest in debt instruments. In case of equity funds, it is recommended to invest money in large-cap mutual funds. This is because companies in large-cap funds are safer compared to mid and small-cap companies. People can also opt for debt mutual funds as they offer stable returns.
- Senior Citizens’ Saving Scheme (SCSS)
SCSS is the investment option available for senior citizens or early retirees. It can be availed from a bank. SCSS has a five-year tenure. The tenure can be extended by three years.
