Smart Investments for Seniors

Everyone daydreams about the moment when they can leave the workforce behind and make relaxation their full-time job, but most ignore the fact that losing a source of income can seriously hinder their vacation plans.

When the checks stop rolling in, it’s best to have your portfolio doing the hard work on your behalf.

Here are a trio of smart investment ideas that can help fund your golden years without putting your nest egg at risk.

Deferred-Income Annuities

In general, annuities are contracts made between you and your insurer, which allow you to incrementally deposit funds for posterity’s sake, and gradually withdraw said funds during retirement. In most cases, they’re relatively low risk and function like a more structured and tax-deferred savings account, however, not all plans have the same regulations. Many banks will have hidden fees, which can certainly put a dent in your disposable income.

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One of the most dependable types of annuities is the deferred-income annuity, which starts with a lump sum deposit to an insurer, and provides you with a lifetime’s worth of income at a later date. Also, this type of annuity isn’t affected by the stock market, so you can depend on a return on investment.

Real Estate Investment Trusts

Sinking money into the housing market can be a risky endeavor, especially for seniors, since it requires considerable industry expertise and a willingness to endure the natural ebb and flow of the real estate sales cycle. Flipping houses also bears the cost of labor (both physical and financial) without the promise of an expeditious return on investment.

A smart alternative is an Equity Real Estate Investment Trust (or Equity REIT), which welcomes investments from private citizens in commercial real estate ventures, generating a stable income for shareholders from rent collected on properties like apartment complexes and condominiums. Though little value is added to the investment if the property is ultimately sold off, the operating company takes on all liability for their respective properties, shielding backers from responsibility for the use and upkeep of each property.

Inflation-Protected Securities

Inflation-protected securities are a relatively reliable option for the cautious investor. Paying out to compensate for inflation, these U.S. government backed securities have fixed interest rates, meaning that the amount investors receive will increase in lockstep with a rising overhead. Though the interest rate is lower than most securities, the plans consideration of economic trends provides favorable results with fewer dangers.