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Investment Property: how to invest after retirement?

July 25, 2013 6:00 pm
posted by James Parnwell
how to invest

how to invest

We know that property investment is a great way of building your finances so that you are able to retire comfortably. But what if you’re already retired? Should you invest to make more or just sit back and learn to live comfortably with what you have? We discuss how to invest after retirement.

We said in a recent blog that in order to retire comfortably, comfortably meaning to be able to afford to retire, you need to have atleast 1million dollars collectively in yours and your partners superannuation account.

So if you’ve just set up your retirement plan with a good-looking 300,000 dollars, you might want to look at re-investing.

The beauty of investing later in life is that you probably have already set yourself up financially and are in a position where you own your own home and have probably pulled out cash from previous investments. You’ve probably got a few ‘wins’ in the property game and confidently know how to invest.

The aim here is not to go back to work so that you can invest your retirement back into the market in the hope of again retiring in ten years. You want to find a plan, like you would have when you first started investing, that works for your current lifestyle and financial situation.

Things to think about

  • What can you and your partner afford to invest?
  • What will you have to cut back on in order for this to work? (remember, investing always takes sacrifice in order to reap the benefits, but your partner probably won’t be happy with you cancelling a long anticipated round the world trip in order to go back into investment).
  • How long are you planning to invest before you think about a full retirement?

How to invest after retirement

There are three basic choices that the average person will have if they are looking to invest after retirement.

You can but your investment amount into a bank deposit, transfer it into a trust fund, or put it into property. These choices all offer a steady increase and don’t have too much risk involved.

  • A bank deposit is the obvious choice when coming into a large amount of money. $300,000 in the bank with a 10% interest rate will make a $30,000 each year. Not bad, but after $7000 out in tax and splitting it with your partner, you’re really only making it $11,500 each.
  • Putting your superannuation into a managed fund offers security and cuts out the stress of having to manage and watch the money yourself BUT it will mean you will have to go back to full-time work. The other important thing to be aware of is that few banks will lend to you unless it is against property.

Investing in property will probably mean you, or one of you, will have to enter the workforce again, probably part time. Plan a time frame that you will be happy to do this for in order to achieve your goals

Semi-retirement for 5 years may not be so bad if you will one day retire with riches!

 

 

 

 

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