Money Mentor: Ideal investment for retirees

The writer

Life begins at retirement. While this notion might initially elicit a chuckle, upon a deep reflection, one may realize how profound this statement is. In Ghana, the retirement age is 60. However, with improvements in medicine and health technology, most of us may be fortunate to live to 80 and beyond. A simple calculation then says that with good health, we can all expect to spend 20 years or more of our lives in retirement. Life, then, indeed, can begin at retirement.

As good as this sounds, there is one fundamental assumption that we humans like to ignore; to do as we please, we must have the income that facilitates our choices. So how can you plan and manage your money well today to provide a consistent cash inflow to promote the lifestyle you want in retirement when you are no longer actively working?

A consistent inflow can only be possible if one thinks about investments. With a fixed capital and a suitable investment, your capital can keep working for you as it pays you monthly interest. Investing during retirement will help you, the retiree, keep up with inflation, bolster financial independence, and to mention a few.

One of the significant challenges during retirement is balancing your need for income and, again, monthly interest-generating growth. The best investment for retirees is one that gives you both stable cash flow and decent capital appreciation while managing risk. Here are some investments for retirees that do just that:

  1. Money Market Investments: Money market investments are short-dated investments with less than a year’s tenure. This investment is suitable for retirees as it provides interest income in the short term while preserving capital. They include Fixed deposits, Bank Commercial Papers, and Treasury bills, to mention a few.
  2. Mutual fund: Mutual funds are an effective way to diversify your portfolio without having to do much research. They are a pool of funds from multiple investors to invest in a diversified portfolio of assets such as money market, stocks, fixed income, and other securities managed by investment professionals or fund managers.
  3. Real Estate: Real Estate is a great investment option for retirees, especially if you are looking for a steady income stream. Investing in rental properties or Real Estate Investment trusts (a type of mutual fund) can be a great way to diversify your portfolio while preserving capital.

Overall, it is essential to remember that there’s no one-size-fits-all investment strategy for retirees. You will want to consider your financial goals and risk tolerance before making investment decisions. You should also seek professional advice to be well-informed on your investment decisions. A sound financial plan can help you enjoy your retirement to the fullest.

By Wendylizza Kwarteng

The writer is a certified investment adviser at SIMS, with over 7 years of experience in investment and relationship management. At SIMS, she works passionately with clients to help them meet their investment objectives and financial goals. She holds a bachelor of arts degree in Economics from KNUST and a Certified Financial advisor by Securities and Exchange Commission (SEC).


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