In today’s day and age, the average lifespan of humans is increasing steadily. Medical discoveries are made every day, allowing people to live long, healthy lives. The downside? People may begin to outlive their retirement savings. Investing after your retirement is the solution.
Investing your money generates more money by earning interest on what you put away. When you take the time to learn investing basics, there is less risk involved. You learn to choose stocks that will generate more money for you in the future.
Bottom line: the best way to make money without working for the rest of your life is to invest.
However, people often see annuities, a sum of money invested to produce a monthly income for a fixed period (or for life), as more attractive than investing in stocks. Especially when interest rates move higher.
In reality, annuities are not so simple.
In the 2013 Berkshire Hathaway Chairman’s letter to shareholders, Warren Buffett writes about “certain fundamentals of investing.” These fundamentals form the nucleus of the Rule One investing philosophy.
Because of this, I’ve included selections from his letter regarding these key points, along with my own comments. I hope my thoughts help to amplify the point he’s making.
When I say the word “retirement,” what image pops into your mind? Is it a tropical vacation somewhere? Is it a golf course with friends? Maybe relaxing with your grandkids? Whatever it is, I hope it’s a happy image. Because retirement should be just that – happy, healthy, and wealthy.
You’ve spent the majority of your years planning, saving, and making money by working hard in your career. Your job may have been your passion, but now is the time to seek out new opportunities.
Over 28% of Americans age 55+ years have zero money saved for retirement. 17% of Americans age 55+ years have less than $10,000 saved.
This means that over 35% of Americans approaching retirement have no savings prepared – other than what they may have in social security.
This is why so many retirees live in fear of the question: Will I outlive my retirement savings?