When it comes to investing in funds, retirees have different criteria to those taking home a regular salary. While it may seem at first glance that this would be disadvantageous for investment opportunities, there are actually some benefits to this new life status.
According to retired accountant Michelle Flores, when one is retired they often have a stack of money that they are not touching. They have finished paying off their mortgages, are likely to have adult kids who are less dependent on them and are thus building up regular savings.
Given that many hedge funds make investments in the property industry, they tend to require a long-term investment which is easier for retirees.
“When you think about it, making investments – especially those that require you to have your money locked in for a set time – is a great opportunity for pensioners with liquid capital,” says retiree Moshe Victor Keinig. “Lock-up periods – which provide less flexibility than traditional EFTs and require at least 12 months – is very beneficial to pensioners given that they tend to offer greater returns.”
One tool that has been created for pensioners looking into investments is the Retirement Planning Calculator created by Personal Capital. This offers a way of checking likelihood of success for retirees through the analyses of multiple algorithms. This free online tool is a great way to manage wealth for all pensioners.