What is the best investment for retirement income? How can you invest your hard-earned money to see to it that you do not have any financial challenges during your golden years? Are there any unique investment vehicles that you can turn to in an attempt to build wealth for your later years? Join me in today’s comprehensive post, in which I will share with you some viable investments that I established were worth checking out after doing some extensive research.
P.S. 
See my Top-5 List of Gold and Silver IRA solutions
Introduction
If you have kids or you are still struggling to build your career, then retirement may not be the first thing you think about when you wake up every morning. But someday in the future, when you have enough funds to put aside in the form of savings, it will be something you will not only think about but will also strategize about.
To ensure that you are financially secure during retirement, then it is wise to create a plan early in life- or right now if you have not taken the time to do so. By diverting a small portion of your monthly paycheck into a retirement investment plan, your funds can grow exponentially, and ultimately present you with the peace of mind you need upon downing your tools of work.
Let’s take a look at some of the investment options that other people have taken up in the past, and relied upon to secure their financial future.
(N.B: There are no guaranteed investments, hence you should always do your due diligence to see to it that you pick the investments that will bring you closer to your financial goals for your retirement years.)
Individual Retirement Account (IRA) Plans
An IRA is a well-defined retirement plan created by the U.S. government to assist workers to save for their retirement years. Individuals are allowed to contribute up to $6000 to these plans ( in 2022). Those aged over 50 can contribute up to $7000, to maximize the potential for returns during their retirement years.
IRA plans are tax-advantaged retirement plans that many people headed to their retirement years seek to utilize. There are, however, different types of plans, with each one presenting its unique benefits. The most common ones include:
- Traditional IRAs
- Roth IRAs
- Self Directed IRAs e.g. Gold IRA, Real Estate IRAs, Cryptocurrency IRAs, etc.
- Spousal IRAs
- Rollover IRAs
- SEP IRA
- SIMPLE IRA
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Real Estate Investments
Real estate is a unique asset class that has been an attractive choice for many investors. Common approaches to investing in real estate include:
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Rentals
Rental real estate provides the investors with steady cash flows in the form of monthly rent, hence enabling them to live a sustainable lifestyle. This does not mean that it is without any risks.
There are times when tenants fail to pay rent on time, and others when there are vacancies between tenants. You are also required to cater for damages and make regular property updates. If you can, however, ensure that you get these variables right, you can enjoy regular cash flows in your golden years, and only have to collect checks every month as you purchase expensive toys and live a lavish lifestyle.
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Reverse Mortgages
If you own a home and would need to access the equity through the home, then a reverse mortgage presents you with an opportunity to do so. A reverse mortgage is essentially a loan that homeowners aged 62 or older can take if they are out to access the value in their home. The value is usually received in the form of a lump sum, fixed payments, or as a line of credit.
Unlike traditional mortgages, investors are not required to make regular payments. The loan must, however, be paid in full once you leave the house or you pass away.
Simply put, with a reverse mortgage, the lender sends you a predefined monthly payment from the equity of your home.
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REITs
If you are not interested in being a landlord in retirement, you can utilize Real Estate Investment Trusts, also known as REITs, which allow you to invest in real estate without necessarily managing the property and collecting rent.
REITs pull money together from many investors to invest in many properties, in a manner similar to that of mutual fund investments.
The good thing about REITs is that they handle the administration and management required, and they are mandated by the law to pay out not less than 90% of their income to investors in the form of dividends. You can purchase REITs through well-diversified mutual funds as well as ETFs, which include:
- Vanguard Real Estate ETF ( VNQ)
- iShares US Real Estate Index (IYR)
- DFA US Real Estate Securities Portfolio ( DFREX)
==>Gold vs. Real Estate | Let´s Compare Them to Decide a Winner
Dividend-paying value stocks 
With dividend-paying value stocks, you can obtain dividends that can act as retirement income. Investors have the option to invest in dividend stocks through a mutual fund, or through an ETF.
What, however, are value stocks?
These low-priced stocks are offered by companies that are significantly undervalued. Such stocks are often less expensive, and they often pay a higher dividend than their counterparts, growth stocks.
Historically, value stocks have outperformed growth stocks. The one thing to note, however, is that past performance does not always guarantee future results. Still, it helps to understand the performance of value stocks over time as you look for ways to invest in them as part of your retirement investment strategy.
I would also recommend that you highly consider diversifying across value stocks since it is possible for some firms to pause their dividend payments if their businesses slow down and cash flows become tight.
Relying on a single company effectively puts your retirement income at risk. You can mitigate your risks by having mutual funds or ETFs that target value stocks, e.g.:
- DFA U.S. Large Value ( DFLVX)
- Vanguard Value ETF ( VTV)
- DFA U.S. Core Equity 1 ( DFQTX)
Informative posts worth checking out:
==>Top Pet Stocks You Can Invest In
==>How to Invest in Farming & Agricultural Stocks | Helpful Info
==>Agriculture Stocks Dividends | Viable Source of Income?
Frequently Asked Questions on “Best investment for retirement income?”
1. When should I start planning for retirement?
It is never too late to start planning for retirement. The earlier you get started the better. Investing early enough gives your investments sufficient time to grow, even when you are only putting aside a small portion of your monthly paycheck.
It also helps you avoid stressing over your investment decisions in the future. I would highly recommend that you get started by educating yourself on the investment options available, before spending on any type of asset. You can, however, put aside some funds for the purpose of retirement investment, so that as soon as you find options, you can start channeling the money to them right away.
New to investing in precious metals for retirement? Read our precious metals investing for dummies guide.
2. How should you change your investment strategy as you near your retirement years?
As investors near retirement, it is common for them to move their funds to safer and income-focused assets. Assets such as stocks, which are riskier, tend to perform better over time, but they may only expose you to the downsides of a market crash if you hold on to them as you near retirement. You may, unfortunately, not have time to recover if a stock market crash occurs right as you retire. As the investment timeline shrinks, it is advisable to move your funds into safer, inflation-beating assets that still promise decent returns. If things are getting out of hand on a global scope, you may need to invest in assets that are a store of value.
3. How much should I save for retirement?
Financial experts recommend that you save up to 15% of your gross annual earnings for the purpose of retirement investing. In a perfect scenario, one should start saving for retirement in their 20s and do so throughout their working years.
4. How should you invest if you are worried about your tax rate going higher during retirement?
If you are worried that taxes will be higher in retirement, then it would be a good idea for you to focus on Roth IRA investments. Roth IRA contributions are made after-tax, meaning that you will not pay taxes on your qualified withdrawals in retirement.
Also Read:
==> See my #1 Recommended Gold & Silver IRA Solution
==> See Top-5 Recommended Cryptocurrency IRA Solutions
Thank you for making it to the end of this post on what the best investment for retirement income is. I hope you found it informative, and that it will help you get started with a solid retirement investment strategy. Let me know if you have any questions with regards to what we have discussed herein- drop them in the comments section and I will get back to you ASAP!
I wish you well,
Eric, Investor and Team Member at Gold Retired!
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