Everyone should have a long retirement waiting for them at the end of years of hard work. However, to make that happen, it’s important to start saving early so that there’s money waiting when the time comes. Not every method of saving is created equal, however, and there are ways to save that will leave you with more money than you initially put in. Here are some savvy ways to save for your retirement.
Invest in Stocks
Putting money into the right company stocks may get you a big return when you’re ready to cash in your earnings. Buying stock offers a more passive way to save for your retirement and is also one of the simplest ways to earn more money. The Balance reports that many of the best stock investment opportunities can be found in the pharmaceuticals, consumer staples and oil industries. A knowledgeable stockbroker can advise you on the specific types of stock to buy and help make the buying and selling processes easier. The best method is to invest early in low-stakes investments that, over time, will build up larger returns rather than going for a quick buy and sell strategy. You can also invest in index mutual funds that perfectly imitate a certain index like the NASDAQ, NYSE or DOW. See: Tips for Successful Investing in 2019
Invest in Real Estate
Putting money into a property that’s rented out to tenants will allow you to earn some steady income that can go toward your retirement. You can also choose to invest in a real estate investment trust (REIT) if you don’t want to have to manage physical real estate. If you are an expert in handiwork or have good relations with people who work in the home improvement industry, you can choose to become a house flipper and buy homes to remodel and resell. In short, there are many opportunities for investment in the real estate industry that can get you great returns in just a few years. One good way to get started is to buy a Duplex and live in one side while you rent out the other side. Before long you will be able to afford to buy a single family house and rent out both sides of your duplex creating a nice passive stream of income to begin funding your retirement.
Open a CD
A CD, which stands for a certificate of deposit, is a type of savings account that’s federally insured with a fixed interest rate. The withdrawal date, or maturity date, is also fixed so that you’ll know exactly when you can take out your money after you’ve earned interest. A CD is often a better investment than a standard savings account because CD rates are usually higher and offer better possibilities of greater returns. This is a great passive way to save up money for those who want to just let their money sit and grow on its own over time.
Use Your Workplace’s Retirement Savings Plan
The company you work for may have a retirement savings plan that makes it easier for employees to save for their golden years. Most places offer 401(k) accounts, which allow employees to invest a percentage of your incomes into a savings plan for their retirement. If your company offers deposit matches, then it’s important for you to take advantage of that. Matching your deposits basically gives you free money that will grow with the rest of your savings in the 401(k) account. While it’s best not to let this be your only investment toward retirement, it’s also one you shouldn’t ignore.
Invest in an Annuity
One major fear in retirement is that you are going to run out of money. The one investment that guarantees that you will never run out of money is an annuity. Annuities are a contract between you and usually an insurance company. You give them a certain amount of money either in a lump or over a period of time. Often they invest it for another period of time and then they start distributing it to you. The distribution phase usually begins after age 65 and at that point you are guaranteed a certain amount of money every year for the rest of your life (although you can get other terms in the initial contract). Annuities can be tricky but they are certainly worth learning about and adding to a portion of your retirement plan.
Saving for your retirement can feel daunting, but investing your money in the right places can give you the boost you need. The sooner that you start saving, the more money you’ll have when you’re ready to put your working days behind you. It’s important to remember, though, that you should invest in multiple areas rather than putting all of your eggs in one basket. That way, no matter how the economy swings, your savings will have your back when retirement comes.
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