For starters, fixed annuities are often considered to provide retirees with a guaranteed income for life, which can help them hedge inflation and potentially offer tax-deferred growth. The second annuity product is fixed index annuities, which have the same benefits related to the before mentioned but have marked-related growth factors. This means that fixed index annuities are considered more of a risk, as they can fluctuate with the market, but depending on the index it may be related to, the reward may often be higher than regular annuities. There are several benefits to annuities, and retirees should consider each product and their benefits individually before adding it to their retirement portfolio. EXCHANGE TRADED FUNDS Often considered a traditional investment option, ETFs are mutual funds that are a mix between stocks and bonds that often track the index benchmark. With ETFs, individuals have the option to buy and sell their mutual fund at any point, as they are priced in real-time, and traded on the stock exchange. Usually, retirees or early novice investors will opt for ETFs as these are considered safer investment options, and are relatively affordable to buy. Important is the fact that the longer you hold an ETF mutual fund or any related stock pick, the better your chances of increasing its value over time. This is true for most investments, and when it comes to ETFs, it’s easy to hold onto it well into retirement, only to later sell it off once it has reached a pinnacle. The longer you hold, the more valuable the fund, and the more likely you are to save on fees and additional costs which can be directed towards your retirement fund. WHY IS INVESTING IMPORTANT IN RETIREMENT? There are several important reasons why one should look at different investment opportunities well before or during retirement. Traditional pension and retirement plans, such as a 401(k) or Keogh Account are no longer enough to financially sustain you during your retirement. The soaring cost of living, volatile markets, and uncertain labour conditions have made it increasingly hard for many individuals to plan and save for their retirement. Instead of holding onto the idea that life savings or an emergency fund will be enough to keep you going once you hit retirement, it’s best advised to start looking for alternative pension options that can help give you a comfortable retirement. FINAL THOUGHTS As many soon-to-be retirees enter their golden years, some have opted to park their pensions in several investment opportunities that can provide them with a sustainable income. Not only are there more options available for retirees in terms of boosting their retirement portfolio and savings, but often these products can provide better financial security as well. Planning for the future can be hard, as we’re not sure what to expect or what to plan for. Yet, it’s rather better to have a financial safety net in place now so that by the time you retire, you can live comfortably off your earnings. Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s 37
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