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Retirement Investment Ideas

Cash loans: Retirement Investment Ideas

Retirement is probably one of the most anticipated moment of someone’s life. This is the part when you finally say good bye to working and actually enjoy life. There are tons of retirement investment ideas that you may start preparing to in order to make the retirement process better and smoother. Here are some of the ideas that may help you put your hard earned money to use.

Buy bonds

When you buy a bond, you cash loans your money to either the government, a corporation or a municipality. The borrower agrees to pay you interest for a set amount of time and when the bond matures your principal is returned to you. The interest income, or yield, you receive from a bond (or from a bond fund) can be a steady source of retirement income.

Annuities

Annuities are contracts between an insurance company and the policy holder, with the former guaranteeing a specific or variable return for the invested capital and making payments to the policy holder and/or his beneficiaries over a specific length of time, even a lifetime. Payments can start immediately or be deferred until retirement or later. An annuity can be structured to resemble a fixed income investment like a bond – adding to principle at a fixed rate – or as an equity investment where growth is uncertain and based upon the performance of a security index, such as the S&P 500.

Rental Real Estate

Rental property can provide a stable source of income, but there will be maintenance requirements, and when you own real estate, you will inevitably incur unanticipated expenses. Before you buy rental property you need to calculate all the potential expenses you may incur over the expected time frame you plan to own the property. You also need to factor in vacancy rates—no property will be rented 100 percent of the time. Investment property is a business, not a get-rich-quick proposition. For those with real estate experience, or those who want to put the time in to make it a business rental real estate can make a great retirement investment.

Individual Stocks

Common and preferred stocks represent proportional ownership in a corporation, the latter being in a preferential position regarding dividends and liquidation. Owners of common stock benefit through a combination of appreciation – the increase in the price of the stock in excess of the price paid at purchase – and dividends. Stocks are usually bought and sold through representatives of brokerage houses acting as agents for their customers who receive commissions for their service. The price of a common stock continuously changes as existing shareholders’ and potential investors’ perceptions about the company’s future change. When investors are optimistic about the future of a company, prices for its common stock increase. When they are concerned or worried, prices remain level or decline. The price movement of a stock is the consensus of hundreds or thousands of investors making individual decisions about the stock – whether to buy, continue to hold, or sell.

Income Producing Closed-End Funds

The majority of closed-end funds are designed to produce monthly or quarterly income. This income can come from interest, dividends, covered calls, or in some cases from a return of principal. Each fund has a different objective; some own stocks, others own bonds, some write covered calls to generate income, others use something called a dividend capture strategy. Be sure to do your research before buying.

Some closed-end funds use leverage—meaning they borrow against the securities in the fund to buy more income producing securities—and are thus able to pay a higher yield.

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