Your main priority once you retire is to reduce risk. You need to have a reliable income so that you don’t have to worry. While every investment you make has a little risk, you’ll want to focus on less risky options now because you don’t have as much time left to rebuild your nest egg. Now your job is to focus on having the funds to pay for your life right now.
* Invest in a Fixed Annuity – With these types of annuities, you can roll over money to it and get a lifetime payment of a specific amount. For example, right now if you had one million dollars to put into a fixed annuity, you can start collecting about $65K a year for your entire lifetime and that of your spouse or your designee too.
* Pay Off Consumer Debt – If you have any credit card debt or other high-interest loans, it will pay off more than any type of investment to simply pay it off. If you have cash, it’s only getting about 3 percent interest, but your credit card company is charging 18 percent (and often it’s more).
* Set Up Investment Accounts with Systemic Withdrawals – Another way to invest is to choose an investment that allows for and even requires regular and periodic withdrawals. This way you protect your cash because it’s there earning as an investment, still accessible, and then budgeted.
* Buy More Bonds – Bonds are safe investments that you can and should put your money into when you’re retired, as they are much safer than just cash and also more reliable than stocks.
* Invest in Dividend-Paying Stocks – There are some stocks that you can and should invest in as a retiree. Any stocks that pay a regular dividend to you is worth it to keep investing in at retirement.
* Real Estate – If you currently own a big house, you can start with renting it out on Airbnb or as a full rental while you move into a smaller place for less. You can also invest in rental properties on your own by buying condos, apartments, and small single-family homes. Hint: Hire a property manager.
Even though you’re not saving for your retirement now, there is nothing wrong with continuing to invest and save if you are also enjoying your life. You may find that you don’t need as much space or as many things now as you did when you had a job and kids at home. Now you can focus on spending money on what you really need and desire, while still being prepared for anything.