Retirement is something most people try to avoid thinking about. This seems strange, since retirement should be some of the most blissful and relaxing years in a person’s life.
The problem with retirement is that it takes years and years of financial planning to make sure that relaxation is actually an option. If planned incorrectly, retirement will instead be a miserable time period filled with fruitless job searches and financial stress.
Luckily, it is never too late to start planning and figuring out what exactly needs to be done. Here are five ways people build steady retirement incomes that allow for safe and secure retirement.
1. Buy real estate
Real estate is an asset that typically goes up in value over time. Sure, there are ebbs and flows, and sometimes real estate will lose value for a few years, but in the long run it has always gone up. It is also expected to continue to do so for the foreseeable future. The world isn’t getting any bigger, and that means that land is becoming increasingly limited.
Buying real estate for your retirement can be as easy as purchasing a home while you are young, or as complicated as going into a commercial venture with some business partners. Getting a home for yourself while you are young can allow you to stop throwing away money on rent and instead put that money to something you own. As long as you are planning on holding the home for the long haul, it is typically a good idea.
2. Fixed deposits
If you are a little closer to retirement and don’t want to risk your current retirement savings then you should look at something called fixed deposits. These are essentially savings accounts that give higher interest rates. You agree to leave the money in the account for a specified period of time, and the bank will agree to pay a higher interest rate than a typical savings account would get. Fixed deposits are similar to CDs.
3. Start an IRA
Many people have heard of these and might consider them too complicated to try and set up. In today’s age that couldn’t be further from the truth. You can open up an IRA in a matter of seconds using just about any broker. There are some brokers coming out today called robo-advisors that will essentially make most investing decisions for you based on your current situation.
One of my favorites is called Motif Investing. They allow you to decide what industries you think will do well in the future, and they will find and make the investments for you.
4. Start an online business
With the way the internet functions today, you can start an online business in just a few minutes. Many people do this because once the business is thriving and they are ready to retire, they can do so, and the business typically continues to thrive with little effort. You can sell physical products, or you can just become an affiliate of a few niche companies and then take a commission every time you refer a customer to them. Many people do this and are able to retire early with a consistent income.
The key to retirement is diversity. Do not rely on a single income source, or you will find yourself in trouble if that single source has issues. Be careful not to rely on the government too much, as policy is always changing, and you never know exactly how much you will really get. Many people believe that social security will take care of them, but current numbers point to a different story.