Uncertainty in the economy and the rise in cost of living means that one cannot rely on a single source of income after retirement and enjoy the fruits of years of hard work.
That said, it is very much possible to achieve a stable retirement fund with some strategic planning and diversification of income sources.
Protection against market volatility as seen in the recent COVID 19 crisis, is crucial to safeguard traditional retirement benefits.This can be achieved by spreading the assets across different investment options to better weather any impending financial storm.
Your place of stay can also impact your savings in your golden years. For instance, advantages for living near a port cruise like Tampa can offer unique income sources to retirees, either through home stays for cruisers or engaging in any kind of part-time job related to the booming cruise industry.
Other streams of passive income which can provide a steady flow of cash could be purchasing a multi-room apartment and renting out some units while occupying one.
Additionally,the property investment can also appreciate over time and add to the overall value of your home and the value of your retirement portfolio.
Investing in dividend paying stocks can also offer another avenue for income diversification without the need of having to sell the underlying asset. A mix of high yield and growth dividend stocks can perfectly balance the portfolio.
For those wary of the stock market, dividend focused mutual funds offer a more diversified approach to reduce the risk factor by spreading funds across multiple companies.
Social security is the cornerstone of everybody’s retirement income, so maximizing its benefits is very important. Delaying claims till reaching full retirement age or beyond can increase monthly payouts significantly.
As discussed earlier, part-time work can also supplement the retirement income and at the same time keep retirees engaged and mentally active.
Given the rising cost of healthcare, a healthy savings account can cover medical expenses after retirement. Having a dedicated medical expense fund can also relieve pressure on other retirement savings. Buying a retirement property in a city like Panama can further help cut costs due to the low cost of living.
Investing in foreign assets can also provide a hedge against any domestic economic downturn. For example, holding some assets in a foreign currency can offer protection against devaluation of your home currency.
Last but not the least, it is exceedingly important to review your retirement investment portfolio from time to time. Study the market conditions in order to make informed decisions on financial goals and risk tolerance.
Working with an accredited financial adviser is highly recommended to gain valuable insights on how better to navigate the complex financial landscape.
Finally, diversifying your investments is a key component of building a sound and resilient retirement plan to increase the likelihood of a comfortable retirement.
If you do so, you will be able to reduce the impact of poor performance in one area, but gain potentially through positive performance in another thereby ensuring long-term stability and the ability to adapt to market changes.
