How much and where to invest for retirement at age 60?
If you are 60, you have not made any savings and would like to have a financial reserve for retirement, the conditions to save the values will be difficult.The emergency reserve must be made in very safe investments, with enough liquidity. Fixed income assets that protect the reader from inflation and generate a safe real income. Once this reserve is made, the reader can direct its savings to assets that do not require immediate liquidity and, for this reason, provide higher real above inflation returns.
In addition, it may apply to slightly higher risk assets that tend to generate higher returns over the long term. There is a preference or risk profile here. Each person has a different tolerance in the face of loss and behavioural finances.By determining the risk profile of the reader, we can fit it into three main categories: conservative, moderate or bold. Each of these profiles will indicate the proportion of riskier investments that will be part of the investment portfolio. Typically, fixed income investments, which are government or corporate debt, are less risky because they are issued with predetermined term and rate.
Another major category of assets is variable income that, as the name suggests, has no predetermined term or remuneration and has a level of risk and, therefore, expected return, higher than fixed income. In this class, stocks are the best-known option, but exchange, commodities and derivatives are examples of other variable income applications.In the fixed-income category, we still find assets that are exempt from income tax and can be an important differential in the net return on investment.Although we treat all these assets in the fixed-income category, we must remember that there is a risk of loss if market conditions change, with sharp increases in market interest rates, in addition to the credit risk of the issuer.
Applying in funds which are managed by professionals who choose these bonds and charge a management fee for this or directly in the securities is also a choice that the financial planner can guide, depending on the reader’s knowledge of the market. There are medicare advantage 2020 managers specialized in fixed income, others in variable income, and others who apply in the combination of these categories, so-called multi-markets. Thinking about succession planning, private pension plans can be an interesting option for long-term savings because they do not go through the inventory and may have tax systems that postpone payment and reduce income tax rates.