Every person must build a retirement portfolio with a mix of market-linked and fixed income investments. This still remains a challenge for many retirees. One generally retires at the age of 58–60, while the life expectancy of the person could be 80 years. Planning a good retirement investment is very important for every individual. In order to do so, one can refer to and consider the following five top retirement investment options:
1) Total return portfolio: Creating a return portfolio of bond and stock index fund is one of the most common ways used by people in planning for their retirement. This portfolio is designed for achieving a long-term rate of return. These portfolios follow a pre-set withdrawal rule which allows to take out around 4–7% every year.
2) Retirement income funds: This is a specialized type of mutual funds and is considered one of the top retirement investment options. This investment automatically allocates your money and diversifies portfolios such as bonds and stocks. This investment is made with a view to produce a monthly income for them which is distributed to the person after retirement.
3) Buying bonds: When you loan your money to the government, a municipality, or a corporation, you get bond in return for it. The borrower of your money would agree to pay you interest in return for a set amount of time. The interests can be received after your retirement and be considered as an income after retirement.
4) Real estate: Investing in real estate can provide you a stable income source which can be beneficial after your retirement. There are certain costs which are involved in buying real estate such as maintenance costs and other unanticipated expenses.
5) Dividend income funds: This comes under the five top retirement investment plan. Instead of investing in stocks and receiving dividends, you can invest in dividend income funds. This will own and manage dividend paying stocks on your behalf.