For a long time, the (National Social Security Institute) was seen as the only income option for the retired population. However, the challenges of recent years have drawn attention to the alternative that each person has of planning their own retirement through their investments.
The first major advantage of this practice is to establish independence from the country’s economy. Thus, you are not exposed to the risk of not knowing what your old age will be like, as the rules of social retirement are constantly changing.
The second benefit of investing for retirement is increasing your income. The amount that a smooth retirement receives from the SSA, in general, is lower than the salary he had in the last jobs, and this drop in income can generate several challenges. Therefore, the best choice is to have investments that bring you a balanced income.
Want to know even more advantages? For now that those who invest for retirement can even choose when they will stop working. That’s right! Depending on your investment decisions, it is possible to retire before reaching the age set by the government.
How to choose investment for retirement?
If your goal is to plan your own retirement, know that it is necessary to learn to identify the best investment options . There are many alternatives to choose from smooth retirement, but only a few of them are ideal for the purpose of retiring. How to know what they are?
The first step is to reflect on what you want for your future. Try to answer the following questions:
What is the income you want to have after leaving work?
From these two answers, you will need to do some calculations. First, define how many years it takes to reach the age you want to retire. Then, assess how much of your current income can be set aside for that retirement plan.
Considering this, it is important that realistic plans are drawn up. After all, it is your financial intelligence and ability to save that will define whether you can retire at the age you want and with the income you want.
Another important care is when thinking about the ideal income to retire. Try to evaluate various expenses to arrive at a realistic value. Don’t forget that, in general, the costs of living in retirement are a little higher, as they can involve more spending on health, travel , etc.
What are the 5 best investments for retirement?
After following all the steps we’ve mentioned so far, it’s time to learn about 5 great options to help plan your retirement. Check out what they are and how they work!
One of the ways to achieve retirement within the period you expect is to build passive income. What does that mean? Have ways to make money even without working. Building an equity in rental properties is a good example of this.
And the best way to build this heritage is through the consortium. That way, you don’t shake your current budget or lose money on interest payments. Thus, it is possible to plan your retirement by making lifelong property purchase plans.
The real estate consortium makes it possible to buy land, build houses and acquire properties both on the plant and already built. With this, you become an investor and can profit from the sale or rent, thus ensuring passive income that will allow you to leave work.
Private pension is another investment option for retirement. Her idea is to be an alternative to the SSA. In other words, it allows the person to build their own retiree benefit. This modality is organized by banks and insurance companies – which offer several plans.
The functioning of a private pension takes place in two phases. The first is accumulation and consists of you making monthly installments applications over the years you are still working.
The bank manages this money in various investments to make it yield until it reaches the second phase: the benefit phase. At the end of the accumulation period, you stop paying the installments and choose whether to withdraw the total amount saved or if you prefer to receive a passive income monthly.
Consumer Price Index
The CPI treasury, unlike the consortium and private pension, is an investment that you make autonomously. It is a financial product offered by the Federal Government and basically works like a loan that you offer and receive interest back.
In the case of the CPI Treasury, this interest rate is linked to inflation. As a result, investments made in this alternative always yield more than the increase in inflation. This feature is very advantageous in the long run as it protects your money from loss of value.
Investment funds are another interesting option for those who want to retire. They are not just an investment, but a kind of package. Your money will be invested in several profitable options — and the person responsible for choosing them is an expert manager.
There are several investment funds available. One of the most interesting for retirement is real estate funds. By investing in them, you profit from real estate without having to buy the good itself. Other options, such as hedge or currency funds, can also be advantageous.
Finally, an attractive way to retire is to invest in stocks. By doing so, you become a partner in publicly traded companies and participate in their profit sharing.
But it is important to note that investing in stocks carries a high risk. In this sense, one way to reduce the danger is to choose to invest in solid companies with good market performance. In addition, tracking the movements of your applications is indispensable.
Planning investments for retirement is the best way to achieve your financial independence. Thus, you ensure balance and tranquility in your routine when you decide to stop working. And you can even put together a good savings account for your kids too . Follow our tips and draw the best plan according to your goals!