Planning for retirement early gives you choices when you reach retirement age and offers you the ability to decide when to retire.
Your retirement funding should contain a combination of company pension fund, retirement or living annuities, property, cash and a portfolio of stocks and shares.
A well balanced portfolio with a strong income element is essential to enjoying a problem free retirement.
Company Pension Fund
Your company pension fund will allow you to withdraw a certain amount of cash, usually up to 30% of the value with the balance being a compulsory annuity investment to provide an income.
Property
At retirement age, you have the option to sell and scale down your property size in order to free up cash which can then also be invested in income producing funds to cater for your monthly financial needs, invested in money market or high interest bearing accounts, or invested in a riskier portfolio of stocks and bonds if you are comfortable with your income.
Annuities
There are various annuities available to you and each persons individual needs for capital and income will effect the choice of annuity. We suggest you read the information on the different types of annuities and the cost implications attached to each different annuity.
Cash
Cash in interest bearing accounts which is easily accessible may be a good idea for those individuals who may need to have access to cash at relatively short notice to cater for unforseen expenses or luxury purchases during your retirement.
Stocks and bonds
Your stocks and bond portfolio will probably be a less risky portfolio during your retirement in favour of stocks that have a good long term history, provide regular dividend payments and steady growth. This type of portfolio is usually established over a period and consists of investments in blue chip companies with historically strong growth and dividend payments.
Take time every couple of years to asses your retirement investment portfolio, check it’s income potential against your current and desired lifestyle choices for the future and adjust it accordingly. Always make use of a good financial and retirement investment consultant to ensure that any changes in investment vehicles do not incur unreasonable costs.
