Lesson type: Think like an investor

The secrets to retirement investing

Before committing to any long-term investment strategy, there are several key considerations all investors must be aware of to ensure they make a careful and informed decision with their retirement savings.

The Investment Series brings into focus the many strategic considerations needed in planning for retirement. We join Bruce Hein, who is looking for realistic long term investments which will carry him through his retirement. We now outline some areas for consideration in regards to investing goals for retirees.

The most important goal for retirees is usually to receive a steady stream of income from their investments, to enable them to maintain a certain standard of living in their retirement years. Another key consideration is ensuring that retirees protect the real value of their investments and don’t run out of money in their retirement years.

Retirement strategies therefore play an important role in helping retirees to achieve these goals.

Specific products can be designed to;

  • Deliver a steady level of income,
  • Target a return above inflation,
  • Invest in cash to help preserve investor capital when investment markets are falling, or
  • Some combination of these.

When considering any product, it is important to accurately match a retirement strategy to a retiree’s objectives and tolerance for risk, as each strategy will present its own risks.

These may include a greater reliance on the skill of the investment manager, performance that is very different to standard market benchmarks, or a more complex product structure.

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