Retirement Investment Tips Anyone Can Use

Updated: August 2020

Right now, there’s a good chance you are already investing for retirement by saving up some of your hard-earned money.

But knowing precisely what investing option is best for your own situation can be a little tricky. That’s where this guide can help.

In this guide, we’ll be looking at some of the best ways to invest for retirement and what you should do in each stage of your life. 

But before looking at some of them, we’d like to say congratulations on the steps you are taking to secure your future.

Planning now for retirement is one of the smartest things you can do.

Without taking these necessary steps to secure your finances during your golden years, you could end up facing some grave consequences.

So congrats to you for wanting to get a handle on it now.

Now let’s begin with the million dollar question.

What’s the best way to invest for a better future?

The truth is, there isn’t a one-size-fits-all approach to retirement investing. 

If there was, everyone would be doing it with great success. And you wouldn’t need any retirement investment tips from us or anyone else.

It is more of a contextual thing and depends on the amount of time you have before you retire, how much money you can save, and how much you need to save.

So this article will show you what to do depending on how long you have until retirement. You can tailor it to fit your needs.

Your Retirement Investment Options

While there are tons of options available when it comes to spending your retirement savings, each one has a flaw.

As such, you will need to remember this and only consider the option that will make the most sense to you at the current stage your in with regards to investing for retirement. 

At the same time, it is important that you learn and know your risk tolerance. Many people just don’t have the stomach to go through with certain options.

While there are investments that could yield better returns, this will often require that you risk some more. It is important that the portfolio you go for leaves you with peace of mind.

With that being said, here is a look at some retirement investing options that could work well for you depending on the number of years you have left before you retire.

If You Have 25+ Years to Retirement

If you are already thinking about retirement and still have some time on your hands, then you are definitely ahead of the curve.

The consensus when it comes to retirement investment is that you should consider asset allocation and your age to work out how much of the portfolio you should put in bonds.

However, it doesn’t have to work like that. If you have the time to invest, then take advantage of stocks that have high returns potential.

Especially take advantage of any program where your employer will match whatever you put in up to a certain amount. This is an incredibly effective way to accelerate your savings, nest egg and retirement plans.

Bonds are also great, but if you have some money on hand, you should invest in stocks. It’s the financial path with the most upside and potential. 

Yes, bonds offer safety, but assuming that you have some money set aside for emergencies, then why not go for an option that provides growth.

Every dollar that you invest in stocks today can potentially turn into several more when you retire. The best way to go about this would be to get a diversified small-cap funds portfolio that is easier to manage.

If You Have 10-25 years to Retirement

As you inch closer to your retirement, the nest egg you need to protect is probably much bigger. During this period, it is essential that you work with controlled risks as you work towards asset protection. 

In other words, protect what you already have.

That doesn’t mean you should stop investing in stocks. Instead, consider putting your money in other types of investments.

Consider corporate bond funds as they have increased interest rates, which will lead to increased bond yields. 

This could provide you with a reasonable yet consistent annual income.

Combined with stocks that have big potential, you’ll have a full and robust retirement investment portfolio.

And at this point in your life, that’s all you can really ask for. 

If You Have Less than 10 Years

The closer you get to retirement, the more you need to think about asset allocation. And you also need to think about preservation. 

As in, preservation of all your assets

This is the stage in which you can least afford to have a bad year financially. During this period, it is essential that you consider how healthy your savings are. 

And it’s crucial that you hold on to most of what you’ve already earned.

When you turn 55, it becomes possible to save more through a tax-advantaged retirement account.

So you should take full advantage of this.

Did you know that for savers 55 years or older can place an extra six thousand dollars annually into their 401ks?

Therefore, if your returns are not as you would like them to be, you could make up a bit of the difference through extra savings.

It’s definitely something you should look at and be open to.

After You’ve Retired

Once you retire, things will change. You will shift from putting into your portfolio and move to gradually withdrawing from it. 

As such, the changes to your reserves should reflect this reality.

You need to know that you have enough years worth of spending money saved up in your savings acct. 

By having a savings account, you’ll be able to shift your investments from stocks and towards bonds… or even lower-yield alternatives like CDs.

These are the safer, less risky bets. Remember, at this stage of your life, you’re trying to preserve most of what you have.

If you can earn a little extra during your retirement, then it’s an added bonus for you and your loved ones.

But in this stage of your life, an abundance of caution is warranted.

You don’t want to squander all you’ve worked for.