7 ways to invest for your retirement

Investment plan for your retirement

There are so many investment plans available. The following points will help you choose the most suitable one for you with fewer risks and obligations to manage. The points are based on the fact that after a while they come to value business ventures for your retirement.

1. Annuity

Annuity is a plan in which an insurance company enters into a contract in exchange for the purchase price to pay out an agreed amount each year while the annuitant is still alive.

Annuitant – is the person on whose life the contract depends.

Annuity – is the amount of money paid to the annuitant.

The benefits of an annuity, especially when used in connection with a retirement provision, is that it ensures that the retiree has an income for an appropriate number of years. The best form of annuity is deferred annuity because it gives you lifetime benefits.

2. Bonds

A bond is a loan to a government or a company in which the borrower agrees to pay a fixed amount of interest, usually semi-annually, until your investment is complete. Treasury bonds are safe, medium to long-term investments that typically provide you with immediate payment every six months during the term of the bond. Treasury bonds have a fixed rate, meaning that the interest rate set at auction is held for the life of the bond. This makes government bonds a predictable long-term source of income.

3. Exchange Traded Funds (ETFs)

Exchange Traded Fund is an investment fund that is traded on exchanges just like stocks. An ETF holds assets such as stocks, oil futures, foreign exchange, commodities or bonds and generally works with an arbitrage mechanism to keep trading close to its net asset value, although deviations can occasionally occur. These assets are divided into shares where shareholders do not directly own or have direct entitlement to the investments in the fund.

ETF shareholders are entitled to a share of profits, such as interest earned or dividends paid.

4. Stocks

In Kenya, the main stock exchange is the Nairobi Stock Exchange (NSE). A stock market is a place where public companies and other financial institutions come to buy and sell bonds and other derivatives. NSE acts as a third-party broker and allows investors to independently buy and sell stocks through stock trading platforms. You can invest directly and indirectly in shares. Direct investing means that you buy shares of a company and become a shareholder, while indirect means that you invest in more than one company and thus spread the risk. Indirect investments are made through an open-end fund and the money is safe so that even the company that defaults, the money is still safe.

5. Mutual Funds

Mutual funds are some of the most overlooked but probably the easiest way to invest much more than both stocks and bonds. A mutual fund is a pool of money, often from like-minded investors. You can sell your shares whenever and wherever you want. All shareholders of the fund benefit from the fund and share in any losses. There are five categories of mutual funds where you can choose the one that best suits your needs.

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6. Real Estate

Real estate is a retirement investment plan that you should never overlook. Landon said “look for what will give you the most bang for your back.” Real estate as a front is a very lucrative opening. However, one should research the market and know the current and emerging trends in the industry. The location of the property is very important and should be chosen well. Some of the most important locations can be near universities, developing cities or major corporate locations. In any investment, capital becomes the main organ for kick-starting the investment. Research different financial organizations and try to compare their payment and financing terms. You can still choose to become a Real Estate Dealer. A real estate dealer is someone who buys real estate with the intention of holding it for a short period of time and selling it to make a profit.

7. Pension Scheme

Retirement plan is a retirement plan that requires an employer to make contributions to a pool of funds set aside for an employee’s future benefit. The pool of funds is invested on behalf of the employee and the income on the investment is given to the employee upon retirement. In Kenya, even the self-employed can still contribute to the social security fund to help them when the time comes.

Retirement is a process that every working employee must deal with. Retirement is just like any other investment but a more crucial one because when you retire your productivity gets low due to health and age. You can start now and by the time you retire you will be enjoying significant benefits that can help you live a suitable life like after retirement. Take a step today and plan to invest now for your retirement and be a happy retired worker living a good life and building the economy even in old age.