Thinking about Retirement Investment? Here are Some Safe Options

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Retirement could mean the end of earning period for many. Therefore making the best use of retirement corpus is important to ensure your money grows and you have a comfortable, secure—and fun—retirement. Investment stakes are high when it comes to retirement; therefore, thorough planning is important to ensure the corpus lasts throughout your retirement years. Here are some safe options you can consider to achieve this goal.

Index funds

Let us first start by understanding in simple words the meaning of index funds. When you invest in index funds, you invest in passively managed funds that mimic the performance of the different market indexes they’re attached to. Investing in index funds can reduce your investment expenses as they typically charge much lower fees than actively managed mutual funds. But you inherently accept average market returns when you go for index funds.

S&P 500

S&P 500 is a market index used to track market performance. It tracks the performance of the largest companies in the US. As S&P roughly tracks the movement of 500 stocks, it lends a nice level of diversification for a retirement portfolio. Why? Investing in the single market sector could mean higher stakes; with S&P 500, you can build a diverse portfolio – without having to put in much effort.

How does it work?

When you invest in S&P 500, you own shares of all 500 stocks that make up the index. S&P has its investments spread out among 11 major industries, including IT, Healthcare, Consumer Discretionary, Communication Services, and others, with no sector having more than 30% of the money invested.

Short-Term Government bonds

A short-Term Government bond is another safe option for retirement investment. These are low-risk finance government projects that pay low interest rates compared to other investments. If the interest rates are low, then why should you consider investing in these bonds? It’s because they offer safety and consistency of income, which means if financial markets go through turbulent times, bond funds often won’t suffer as much as stock funds.

Final Words

A retired person needs to plan, protect and safely invest his/her hard-earned money to ensure a stress-free tomorrow and financial stability. Therefore when investing your retirement money, it is crucial to do your research and understand the best options for your needs. The key here is to – be well informed and never invest in anything you don’t understand.