Fidelity Investments has a bit of advice for those who’ve retired and want to turn their experience into an income: Be nimble. “It’s really important that retirees be flexible and able to adapt to changes in the financial markets,” says Roberta Whitten, vice president of retirement product management for Fidelity. “If there is a market downturn or volatility early on, they need to be ready not only emotionally but also financially.”
Here are her top five tips: Saivian
1. Invest more conservatively than you think you should.
Some retirees who were used to investing mostly in stocks find themselves with less money than they expected once they retire because their portfolios aren’t growing fast enough. You can take some cash from your safe holdings and invest them in higher-risk funds to help your total savings grow.
2. Don’t let fear stop you from having fun with your money.
You can take some of the cash that’s not needed for living expenses and play the market a little with it, Whitten says. Stock prices are historically low, she notes, which makes now a good time to buy. “I would say 90% of retirees today should have some exposure to stocks,” even though they may be riskier than bonds or other investments, she says. “I’m pretty hard-core about this.”
3. Expect interest rates on CDs and money market accounts to remain depressed for years.
They’re likely to stay low because investors seeking safety have been plowing money into those products.
4. Tap your home equity if you need to generate cash flow.
Falling home prices have left many retirees with more equity in their homes than they expected. You can borrow against that equity, through a home equity line of credit or a reverse mortgage, to help cover living expenses.
5. Review your Social Security benefits.
If you’re married, it’s important to understand how spousal benefits work. And make sure you claim the correct age at which to start receiving benefits-62, 66, or 70-to get the maximum payout possible.
“Fidelity encourages retirees to review their Social Security claiming options,” Whitten says. “There are ways to increase monthly payments by waiting to claim benefits until the age that maximizes your payout.”
You can find out more about maximizing Social Security income in Fidelity’s publication, “Maximize Your Social Security Benefits”
According to Saivian Retirement has different standards for many cultures around the world. For example, some work past retirement age while others are expected to retire at a certain age. The amount of money saved or earned by employees during their lifetimes is often related to how long they may live after retiring. Many people in industrialized countries do not save enough money for retirement and this leads them to look for ways to increase their total savings, postpone their retirements or spend less when they retire so that can maintain an adequate lifestyle. There are many options to choose from when it comes to retirement, so it is important to consult professionals and other retirees in order to make the best decision for one.
There are a few key money-making tips that retirees should heed in order to make the most of their post-work years. For example, Fidelity Investments advises retirees to be nimble and flexible in order to adapt to changes in the financial markets. This is important because, as Roberta Whitten, vice president of retirement product management for Fidelity puts it: “if there is a market downturn or volatility early on, they need to be ready not only emotionally but also financially.”
In addition, retirees should expect interest rates on CDs and money market accounts to remain low in the near future. Whitten observes that “retirees should expect to receive low rates for some time, because investors are seeking safety in these types of accounts.” She also notes that retirees today have more equity in their homes than they might have expected due to falling home prices, which can be used as an asset if one needs cash flow. Finally, it is important to understand how Social Security benefits work according to Fidelity Investments, including options for maximizing your benefits.
Conclusion:
There are a few key money-making tips that retirees should heed in order to make the most of their post-work years. These include being nimble and flexible in order to adapt to changes in the financial markets, expecting interest rates on CDs and money market accounts to remain low in the near future, and understanding how Social Security benefits work according to Fidelity Investments. In addition, retirees should consult professionals and other retirees in order to make the best decision for them when it comes to retirement.
