If your getting close in age to retiring or you are planning to retire soon, you could be concerned or worried about where to put all of your money safely. This feeling can intensify if you take a look at your children and their long educational career ahead. This can be a daunting task to choose between stocks or bonds or any other medium before you retire.
Stocks and bonds are the two most common assets and people still think about which one is the best option that you should be choosing. In this article, we will be letting you know how to and what to choose between stocks or bonds for your retirement.
Below we are mentioning four factors which you should consider when you have to decide between stocks or bonds for retirement.
If suppose you are retiring at the age of 50 or even 55, you still have a long time to stack up lots of money. If you live up to 80 years, you have plenty of years ahead for you to stack upon a lot of money. So, at the time of your retirement, it is advisable that you take an estimate of how long will you live.
You have to jot down and consider what goals are left incomplete and what do you need to do. Take account of your retirement money and write down to what use will you put it to. Normally, people set down three main objectives to meet with their retirement money, long-term growth, cash outflow and thirdly both of these.
Even if at the present moment your objectives are cash flow oriented, there is always a chance that you will need growth.
Inflation is a common part of life and it increases by 3 percent every year which is annoying but it is the truth. If this level of inflation keeps on increasing at the same rate, a person who needs 50000 dollars for annual expense, would need 90000 dollars in the two years instead and 120000 dollars in 30 years.
These figures are an estimate because these costs do not cover the everyday expenses that are made. Even hospital and medical charges have increased since the past many years and have doubled up. Money is not only required for support, but it is also needed to purchase a lot more than it is intended.
For people who have or are about to retire, they believe that it is much better to buy stocks in order to get the long-term growth. Over the years and with past experiences of people, it was evaluated that stocks are much better than any others like for instance bonds.
However, it all depends upon your needs because in some cases it is also said that people finally want some bonds as well. Bonds are not required for income but they are needed for the support of cash flow.
People also make a common mistake of piling up and putting too much in to stocks which they should not. It is much better to make a very safe and smart choice.
You can take the help of an investment advisor
At times like these when you feel you have no other option or when you cannot decide what to do, you can easily take the help of an investment advisor. Of course, he will take some fee for the services he might provide you but in the end, it will be all worth it because he will guide you to the right decision.
The investment advisor will ask you the entire situation, ask your preference and then keeping your situation in mind advise you on the best possible way to spend your retirement. Retirement is not easy specially if you have family and children who need financial support. However, with proper planning and evaluation, one can always think of a better way to solve this issue.
On the whole, it can be said that it is better to invest in to stocks when your time for retirement approaches rather than bonds. Make sure you make the right choice.
