Of the many ways to achieve your retirement goals, the best is to plan and determine which retirement funds to invest in. Many retirees use these funds to take long vacations, go back to college, start a second career, or purchase a new home. Finding top retirement funds can be a daunting task. However, the retirement fund that aligns with your goals and situation may be the best one for you.
How to evaluate your options to invest
Before you start finding retirement funds, you must consider the amount you plan to save. For example, if you plan to save 10% of your income, you can invest in any investment vehicle. But to save 20%, you need to find investment vehicles specifically designed for high-risk investments. A retirement calculator can help you determine how your investment choices will affect your retirement funds. Take the time to research investment options for the best returns and most risk. You can then find the best retirement investment vehicle for you.
Top investments for a secure retirement
1. Pension funds or Retirement Mutual Funds
With pension funds, your employer invests funds on your behalf and sets it aside for your future retirement. The returns on these investments generate your retirement income. Such funds offer up to 11% interest based on the policy and investment. Pension funds typically invest in low-risk investment vehicles like government securities for steady returns.
2. Sovereign Gold Bonds
Issued by the RBI on behalf of the Government, these are bonds secured by Gold as the underlying asset. The benefit of these bonds is that they are in a Demat format thereby removing the hassle of holding physical gold. Additionally, they give a 2.5% yearly interest and the resulting capital gains on redemption are completely tax-free.
3. Real estate investment trusts (REITs)
These can be some of the best investments on the market. Real estate tends to appreciate, which means that you can easily knock off a few percentage points off your investment over time. If you invest in commercial real estate, you stand a good chance of making a good profit.
4. Immediate annuities
These are a type of insurance that provides guaranteed income immediately. You start receiving your pension within a year of investing the initial premium. This is an ideal investment vehicle if you are nearing your retirement.
5. Unit linked insurance plans (ULIPs)
ULIPs offer you the benefits of insurance along with the opportunity to gain investment returns. However, returns can vary because you can select a combination of equity, debt, or hybrid funds.
6. National pension schemes (NPS)
NPS is a voluntary retirement scheme to effectively help you accumulate your planned retirement corpus. They offer guaranteed returns but may differ based on the tier and asset class. One can choose to invest more in fixed income and low-risk assets and less in riskier equities so as to safeguard wealth and also grow steadily.
7. Government bonds
Although they tend to be more uncertain than other investments, the funds will be available as needed if the government issues them. Unlike other kinds of funds, this requires long-term planning for optimal results.
Keeping your retirement goals at the forefront, and researching the above options in depth can help you start investing. Save and invest a significant amount to reap the benefits of your retirement funds. Remember that investing for retirement can be difficult, but with a bit of patience, you can achieve your desired corpus.
