The best ways to save for retirement besides a pension

Retirement should be when you finally put your feet up and relax after decades of putting your career first. However, this stage of your life can be difficult if you haven’t set a good plan to retire comfortably. It’s never too early to start planning for your retirement. Planning is crucially important, though, and many of us who do not prepare properly end up working well into our retirement age.

Having funds to fall back on is a luxury many people cannot afford. However, even if you are lucky enough to have lived frugally and have saved ample amounts to retire with, there are other aspects to be wary of. 

Economic factors such as the strength of the currency, inflationary pressures and finding out what is deflation and how it impacts your retirement funds are all good ways to stay ahead with your finances.

Ensuring you have financial security and can continue to keep up with a decent quality of life is essential. For many, it is the main driving force for saving for retirement. Today, we will look at some other ways you can prepare for retirement, by utilizing your funds via other methods to stretch them further.

Investment funds

During times of high inflation, as we experience at the moment, the actual value of your retirement funds takes a hit. One investment tool that some people use is an investment strategy to counteract the negative consequences of inflation, and to learn how to keep your funds either in line with or ahead of inflation.

Ensuring you perform the necessary research before placing your money into this type of fund is vital. Some funds will pay a steady amount, which may be from 3 to 5%, and some can promise higher returns but are usually more volatile. It depends on your risk appetite and it is always best to consult a financial expert before making important decisions like this. 

There are hundreds of funds to choose from – some will specialize in the stock market and others will look at other markets, such as overseas emerging markets and commodities like oil and gold. 

Many investors with considerable retirement funds will use trust funds to leave money for their loved ones. However, they’ll usually have strict withdrawal policies and it is best to research the product where you’re placing your funds.

You can even invest in line with your lifestyle and ethical beliefs. For example, plenty of ethical funds offer opportunities for you to invest in vegan companies, green energy companies and renewable energy sources. You can also invest more generically in index funds – usually the collective value of several companies or a specific market.

Real estate investment

One of the most popular ways in which people generate income is by investing in property. Given the monolithic nature of the property market, it is considered one of the best investments for consistent, long-term gains. 

Again, this is something you need to research. Even though real estate has proved lucrative for some investors, incidents such as the 2008 financial crash caused investors to lose eye-watering sums of money.

Some uncertainty has shrouded the housing market recently and although there have been sticky economic times across the board, a real estate investment will usually demand considerable capital. So you want to ensure you are investing at the right time and that you are armed with all the facts.

Even factoring in negative economic news, individuals and businesses will always need premises to live in or work from. In addition, real estate’s consistent and constant nature makes it more reliable than other markets. Still, if you do not understand it correctly, you could run the risk of eating into your retirement fund with a hasty and poorly thought-out investment.

Conclusion

We have covered the two most popular ways people increase the value of their retirement funds. These are both broad areas, and some techniques and strategies will allow you to make more money than others.

It is essential to strike a work/life balance, especially in retirement. You don’t want to work for decades only to end up having to manage a portfolio of properties full-time in your retirement as well. Striking that balance is crucial and it isn’t easy to get it right. 

It all depends on your personal preference. If you want to manage properties in your spare time, then a real estate investment could be your ideal route. However, you should consult somebody qualified to give financial advice before making decisions with your hard-earned money.