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5 Investment Tips for Seniors

By    |   Wednesday, 20 September 2017 09:50 AM

Retirement doesn’t need to mean the end of earnings. With a few solid investment tips, seniors can use their savings to replace the income from their full-time jobs.

Investment is a risky business though and, in the ever-changing financial landscape, you’ll want to make sure you're making sound decisions.

Here are a few tips to get you started:

1. Real estate-based partnerships — If you’re a first time investor or really don’t trust the markets, a real estate based partnership is a fairly safe way to invest.

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Salvatore M. Buscemi, managing director of Dandrew Partners in New York, told U.S. News & World Report that this usually involves 20 or 30 people investing in a piece of commercial real estate. He points out, however, that you’ll need to do your homework to make sure the developer has a good track record.

"I would find a real estate attorney locally in town, and I would ask him if there any deals, partnerships that are being put together where people are investing in what we call stabilized commercial real estate, not value added."

2. Strive for balance but go broad with your investments — If you want to invest in bonds, CNBC suggests looking at total bond market exchange traded funds (ETFs).

When looking for an ETF, you want something with a large asset base and low fees with diverse exposure in all kinds of investment grade bonds. 

More conservative investors may prefer balanced mutual funds where 20 to 40 percent of a company’s funds are in assets, with the rest in bonds.

Speaking to Bankrate, John Corn, a financial planner with Buckingham Asset Management says it’s important to add stocks to your portfolio. “In spite of the short-term volatility, (stocks) have an expected return that is higher than inflation.”

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3. Corporate bonds — If stocks are too rich for your blood, you may want to look at including corporate bonds. While they’re riskier than government bonds, they’re still safer than playing the stock market.

You’ll need to look for an option with high liquidity and diverse exposure for a steady income stream. Speaking to CNBC, Todd Rosenbluth from independent investment researchers CFRA says iShares iBoxx $ Investment Grade Corporate Bond Fund, with an annual fee of 15 basis points, is a good option.

4. Immediate annuities Kiplinger suggests early retirees use a portion of their savings to buy an immediate annuity.

When you do this, you’re essentially investing a lump sum into an insurance company with the promise that it will be paid back to you, with interest. Lifetime annuities don’t really adjust for inflation but, with an immediate annuity, payouts are higher and increase with inflation.

You can increase your payouts even further by adding an amount every couple of years.

5. Take advantage of investment resources — New investors should always seek the advice of a financial advisor or an investment expert.

When choosing a financial advisor as a senior, NerdWallet says there are a couple of important questions you need to ask:

  • Is the advisor a Registered Investment Advisor?
  • Who will be the custodian of my securities?
  • Does the advisor earn a commission on what he or she recommends?

If you really do want to do it on your own however, there are plenty of free resources available to help you learn.

The U.S. Government’s www.investor.gov website has a section dedicated to seniors where you can pick up tips, learn investment strategies, and stay up to date with investment news.

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Retirement doesn’t need to mean the end of earnings. With a few solid investment tips, seniors can use their savings to replace the income from their full-time jobs.
investment, tips, seniors, aarp
Wednesday, 20 September 2017 09:50 AM
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