Tuesday, July 23, 2013

Investment Strategies for Retired British Expats

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.