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Wednesday, February 9, 2011

Make your retirement lifestyle recession proof

In this economic down slum, the lifestyle that we lead matters a lot. As most of the retirees have a fixed source of income after they quit work, they should bring some changes in their lifestyle to cope up with the recession. Here are some valuable tips to help you

As you have fixed income after retirement, one of the best ways to start a proper retirement lifestyle planning is to divide your retirement money into various categories like:

  • Money which you will needs in the next five years

  • Money that you will needs from the 6th year to the next 15 years

  • Money that you will not needs for at least 15 years

By properly making the division, you can easily determine the “the time of planned use” and modify your retirement lifestyle likewise. These categories vary according to individuals and also on the cost of living and the funds available.

For the first category, the best channels to keep our money are in short term saving accounts, high quality bonds, and money market mutual funds or in Bank CDs. Although the rate of interest may be low, investing in longer policies may affect you in the long run.

For the second option or category, there is need of some liquidity. One of the very good options is to put money in annuities. They offer good returns and are also not so much affected by the market swings. To get the types of annuities that are ideal, you need to take help from your financial adviser.

In the last category, you can put money in various channels like long term bonds, stocks, mutual funds, REITs and other long term investment plans. This is some what of an investment ladder which the retirees should use to get benefits and have a descent lifestyle even in this recession period.

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