It’s not easy to have a smooth life after retirement without having returns from your investments. The social security checks are not just enough to cover the expenses after retirement. It can barely cover your food costs, shelter and utilities. It might be tough at times when you have an unexpected emergency and need extra funds. Therefore, it’s very necessary that you have your own financial planning. There are many kinds of investments that you can make and it will help you down the road to an easier life.

For beginning investors, these are some brief descriptions to familiarize themselves with different kinds of investment options:

• 401K plans : the easiest and most popular kind of investment for anyone is the 401K plan. There are many jobs who offer this kind of savings program. Money will be automatically deducted from your payroll check and it will be adding up as an investment after retirement.

• Life Insurance : this is another kind of investment that is fairly popular. After your death, your family will be benefited from your insurance policy because it will generate a steady income for them. It’s a kind of mental security for you that your loved ones will be safe and under cover after your death. It also provides a valuable tax deduction.

• Stocks : this is a unique kind of investment because it allows you to take a partial ownership in a company whose shares are available in the market. The returns through stocks are potentially bigger and it can often be termed as the right way of investing your money.

• Bonds: this is a promissory note from the government or a private company. You agree to give a certain amount of money to the company and they agree to keep it for a set number of years with a definite amount of interest on it. This can be a safe kind of investment for a first time investor because there is usually no risk of losing money.

• Mutual funds : this is a kind of investment that is based on the gains and losses of a shareholder. There is one person who manages the money of several investors and puts the money in a list of various stocks so that any kind of losses can be minimized.

• Money market funds : it’s a good short term investment. With this kind of investment, you can earn interest as an independent shareholder.

• Annuities : if you are interested in tax-deferred income, then the perfect kind of investment will be from annuities. You make an agreement with the insurer. It works to produce income for you and protect your earning potential.

• Brokered Certificates of Deposit (CDs) : this is a kind of investment where you deposit your money for a set amount of time. The good thing about it is that you can release your money at any time without having to pay a penalty fee. Life is not predictable, so this might be the right kind of investment for the common people.

• Real estate : a very tangible kind of investment is putting your money on real estate. It includes your land and anything that is permanently attached with the property. You can generate a lot of income from the fixed property by renting it or even by selling it over the time.

This entry was posted on Monday, February 25th, 2008 at 6:13 pm and is filed under Investment. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.