Regardless of the way in which we choose to invest to generate an income for us in retirement, we should all stick to some basic principles.
I should say at this point that there is a need to have a very deliberate strategy right from the very beginning of your investing experience. However, for the purpose of this blog I shall only be addressing the considerations relating to those approaching retirement or even in retirement.
For those that literally need to start generating an income now from their investments, I would say the key considerations are:
- Is your capital safe enough to maintain its value over time and offer only reasonable levels of fluctuation?
- Will your capital grow over time so that your income too can grow in line with inflation?
- Is the income you will be receiving complementing your other income sources?
- Is your capital invested in a way that complements your future desired lifestyle?
- Are your income generating investments diversified enough to ensure your income is not reliant upon one source?
- Are you able to manage or outsource the management of the capital easily?
These are just some of the considerations you should be taking into account before deciding precisely how to invest for income in retirement. Ultimately it is about creating a sustainable source of income that is going to allow you to live your life and enjoy that income.