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investment plan for your retirement
There are many investment plans available out there. The following points will guide you to choose the most suitable one for you with less risk and commitments to manage. The points are based on the fact that after some time they are going to appreciate business ventures for your retirement.
1. Annuity
Annuity is a plan whereby an insurance company enters into a contract to pay an agreed amount of money every year in lieu of the purchase price while the annuitant is still alive.
Annuitant – is the person on whose life the contract depends.
Annuity – is the amount paid to the annuitant.
The benefits of an annuity especially when used in connection with retirement provision will ensure that the retiree has an income for a convenient number of years. Deferred annuity is the best type of annuity as it gives you lifelong benefits.
2. Bandhan
A bond is a loan to either a government or a corporation, whereby the borrower agrees to pay back a fixed amount, usually semi-annually, until your full investment. Treasury bonds are safe, medium- to long-term investments that typically offer you immediate payments every six months during the maturity of the bond. Treasury bonds have a fixed rate, meaning that the interest rate determined at the auction is locked in for the entire life of the bond. This makes Treasury bonds a predictable, long-term source of income.
3. Exchange Traded Funds (ETFs)
Exchange Traded Fund is an investment fund traded like shares on stock exchanges. An ETF holds assets such as stocks, oil futures, forex, commodities or bonds and typically operates with an arbitrage mechanism to keep its trades as close to their net asset value as possible, although divergence can occasionally occur. . These assets are divided into shares where shareholders do not have direct ownership or claim to invest in the fund.
ETF shareholders are entitled to a proportion of profits such as interest earned or dividends paid.
4. Stock
The main stock exchange in Kenya is the Nairobi Stock Exchange (NSE). The stock market is a place where public limited companies and other financial institutions come to buy and sell bonds and other derivatives. NSE acts as a third party broker and allows investors to buy and sell shares independently through share dealing platforms. You can invest in shares either directly or indirectly. Direct investment means you buy shares from a company and become a shareholder while indirect means you invest in more than one company hence spreading the risk. Indirect investment is done through an open-ended fund and the money is secured so that even if the company defaults, the money is safe.
5. Mutual Fund
Mutual funds are some of the most overlooked, but the easiest way to get a lot of investment compared to both stocks and bonds. A mutual fund is a pool of money, often pooled together from like-minded investors. You can sell your shares as and when you want. All shareholders of the fund benefit from the fund and share in any losses. There are five categories of mutual funds where you can choose the one that suits you best.
6. Real Estate
Real estate is one retirement investment plan that you should never ignore. Landon said ‘look what’s best for your back’. Real estate is a very lucrative opening as a front. However, one must research the market and know the existing and emerging trends in the sector. The location of the real estate matters a lot and should be chosen well. Some prime locations may be near universities, developing towns or large company sites. In any investment, capital becomes the main component to start investing. Research different financial organizations and try to compare their payment and funding terms. You can still choose to become a real estate trader. A real estate trader is one who buys property with the intention of holding it for a short period and selling it to make a profit.
7. Pension Scheme
A pension plan is a retirement plan that requires an employer to contribute to a pool of money for the future benefit of the employee. The pool of funds is invested on behalf of the employee, and investment earnings given to the worker upon retirement. Self-employed workers in Kenya can still make contributions to the Social Security Fund to help them when the time comes.
Retirement is a process where every surviving worker must come to terms. Retirement is just like any other investment, but more important because when you retire, productivity declines due to health and age. You can start now and by the time you retire, you will have significant benefits that can help you lead a suitable life after retirement. Take a step today and plan to invest for your retirement and be a happy retired worker and lead a good life and build economy even in old age.
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