Investment
Strategies for Retired British Expats---Michael Jones always makes a point to be
well-informed, and he is a political enthusiast who writes on topics in the
realm of international finance, including pension transfers to Gibralter.
His other interests include snow-shoing, cross-country skiing and reading the
occasional crime novel.
Just because you’ve
retired doesn’t mean you should sit back and let someone else take care of your
financial decisions for you. In fact, quite the opposite is true. Now is the
time to make sure you understand exactly where your money is and how it should
be allocated. Thanks to better healthcare and other reasons, retirees are living
progressively longer lives than ever before. It is not uncommon for retirees to
live 30 years or more after starting to receive their pensions.
That is plenty of time for
a pensioner to get his or her hands dirty and learn quite a bit about the world
of finance. Thirty years is plenty of
time to watch an investment mature and produce bountifully. Besides, if you are
living longer you will certainly want to keep the money coming to fund your
retirement. You’ve scrimped and saved
for a lifetime in order to retire in relative comfort. Knowing that, this is
not the time to entirely hand the reins of your life’s hard work over to
someone else.
That being said, if you
are going to invest after retirement be smart about it. If you’ve gotten this
far you are likely more conservative minded with your money than you were in
your youth. Don’t fall for the promise of quick returns on risky investments.
Be careful of the promises and temptations made by self-proclaimed experts in
the field. If you have retired to a community with plenty of other retirees
around, you can bet your pension (but don’t) that lurking nearby are those that
make a living out of swindling money from your fellow retirees.
If you are going to
indulge in some risk with your investments, do it towards the beginning of your
retirement. However, with years ahead of you, you should feel fairly confident
that safer investments will still produce a bounty of fruit over the course of
your retirement. As always, balance your risk with diversification.
Also take advantage of
investment opportunities specifically catered to your individual financial
situation. If you are a pensioner, explore opportunities to invest in pension
investment packages with a good track record and reputation. As a British expatriate,
or even if you are an American that has worked in Britain, seriously consider
the tax advantages of a QROPS
or QNUPS package. If you are ex-military, search out investment opportunities
specific to veterans.
If you have become risk aversive
in your golden years, consider index funds as an investment option. This option
is low risk in that your investment won’t tank if one or more stocks fare
badly. The risk is spread out over a large number of stocks. A few bad
performing stocks are balanced by the majority of other stocks. Yields will be
more modest but they will be consistent over the long run.
If you are interested in
the housing market, you may want to invest in a Real Estate Investment Trust (REIT).
This option allows the investor to reap the benefits of a burgeoning housing
market without investing money directly into individual homes or having the
responsibilities associated with home ownership. As a result they are a highly
liquid means of investing in the real estate market. REITs receive special tax
benefits and often offer investors high yields.
