Get the Most From Your Golden Years: How to Invest When You’re Already Retired


invest when retiredSo, you’ve spent your entire working life saving and investing diligently for your retirement, and now the years you’ve saved so hard and long for are upon you — it’s time, or almost time, to retire. But you shouldn’t stop investing your savings just because you’ve reached retirement age.

Most people who reach age 60 or 65 assume that they won’t live longer than another 10 or 15 years. They base this assumption on the idea that a person’s average lifespan at birth is about 74 years for a man and 79 years for a woman.

But what you may not realize is that, as you get older, your predicted lifespan actually increases— if you’re already 65 years old and still in good health, then you can expect to live to at least 81 if you’re a man and 84 if you’re a woman. It would not be unreasonable to assume that you might even reach your 90s — and that means managing and growing your wealth throughout retirement so that your money lasts another 30 years.

Minimize Your Risk

There’s no such thing as a risk-free investment, but all the same, retirement is not a time to take big risks with your money. Your prime earning years are over, and the expenses of old age can be unpredictable, especially on the health care front.

Instead of going for volatile, high-risk investments that promise a huge return, shoot for more modest returns of four to five percent a year. If you’ve saved enough money for your retirement, you should be able to live on four to five percent of your income, especially if you have Social Security payments, a pension plan or other assets to draw from. But don’t play it too safe with your retirement savings, or you won’t get the returns you need to support yourself as well as you’d like.

Diversify Your Portfolio

Diversification is a crucial aspect of wise investing at any age, so don’t forget this rule of thumb once you’ve retired. Spread your investment income over a broad range of assets. It’s a good idea to get the help of a financial advisor in making these decisions, but be sure that you can afford to pay his or her fees as well as any brokerage fees associated with your investments.

Mutual funds are always a good bet when it comes to generating some retirement income, since these funds come with built-in diversification. Choose from one or more high-performing mutual funds. Other options for retirement investment income include annuities, insurance products that pay fixed monthly payments for as long you live and rental properties, as long as you’re comfortable with maintenance and unexpected expenses. If you don’t want to manage a rental property or properties yourself, consider investing in a real estate investment trust fund. International bonds and a mixture of domestic and international equities are a good way to add some low-risk growth potential to your portfolio, too.

Protect your lifestyle from market volatility by keeping a percentage equal to your age in low-risk or easily liquidated assets. If you’re like most Americans, 40 to 55 percent of your retirement income will come from Social Security or a pension of some kind. Remember to keep some of your savings handy in a bank account or other easily liquidated asset, in case you need it.

Be Patient

Since you can realistically expect to live for another 20 or even 30 years, you need to remember that time is still on your side. Withdraw from your retirement investment accounts only what you need to maintain your lifestyle each year. Leave the rest alone. As the years pass, your money will grow.

Even if you encounter market volatility in your retirement years, chances are good that you will still have enough time to wait for the market to recover. Don’t panic and liquidate all of your assets if the market takes a downward turn; just continue withdrawing only what you need to maintain your lifestyle, in order to minimize your losses.

Retirement may be upon you, but it’s not time to stop investing yet. It’s just time to change your investment strategy to focus on giving yourself the investment income you need while making your money last as long as possible. With the right combination of investments, you can enjoy the last years of your life free from financial woes.

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