Investment is one of the most important things you should consider when it comes to your future. The lack of investment income has lead to more than one person ending up in financial problems when they reach the age of retirement. Starting is always advisable but it’s never too late to make a positive change in your financial future. What follows are some financial ideas for you to consider at various stages of your life.
When people think of retirement they often think of simply investment. The common investment models include the stock market and IRAs. What is less well known is using insurance as an investment. There are some forms of insurance that have investment built into them. You should consider insurance as a viable choice when building for your finical future. The best financial plan should be a mix of several different methods and it’s always wise to not lean too much on one investment source.
The Early Stages Ages 20-40
IRA: The IRA is all about the long game. IRAs are a type of investment with a set cap that varies based on age. The advantages to IRAs are they have special tax rules and make great use of compounding interest. They reach their best values in later years. The longer you invest in one the better it is, and by the time you reach retirement age you could be looking at a very comfortable nest egg.
Universal Life Insurance: Universal life insurance brings with it a lot of flexibility and a cash investment feature. Any payments above the premium go into a tax-free interest account. Because you can modify the policy levels and frequency of payments universal life insurances offers a lot of flexibility over the long term. There is also a transparency of cost as all administrative expenses and the insurance costs are known to the policyholder. Make sure you compare life insurance rates since you are early to the game and should be able to get a really good rate.
The Later Stages Ages 40-60
Index Funds: The index fund is an interesting form of investment that doesn’t get nearly as much press as other forms of investment. In basic terms you can describe an index fund as a stock collection. Index funds are built out of the stocks of several well-known and high value companies. Most index funds offer very good return rates on investment when you look at their overall performance. What makes an index fund an attractive later investment is its setup. Index funds payout based on a percentage of the current amount invested into shares. They don’t require a long build up period to start paying their normal rates. Because of this they can be very useful to you when you’re in the matured phase of your career and have the capital to put into them.
Term Life Insurance: Term life insurance is also an investment. Investment is about more than making money and building interest it’s about protecting it as well. Medical and end of life expenses are a leading cause of bankruptcy. Term life allows you to buy life insurance for a set amount of time at discounted rates. It’s a valuable and essential investment on protecting what you already have from chance events.
It’s never too late to get started. Part of making wise investments is playing the long game and being prepared for the things that can go wrong. With a combination of investment types you can make sure your income is being used to its fullest and that it is guarded from unpredictable events.