For many, saving for retirement is their top priority. Everyone wants to spend their retirement income fulfilling their aspirations or simply relaxing during a trouble-free, quiet old age.
It is no coincidence that the elderly are among those who travel the most and take part in cruises and other leisure activities.
However, it is important to have a method to save safely for retirement.
Otherwise, the effort may not be worth it, may not be enough or may end up harming the quality of life in the present.
This action must be done in a way that guarantees the future, but without harming the present.
It must be done realistically and by evaluating the different existing options, so that the best alternatives are chosen.
To better address this issue, we wrote this article, addressing the subject and clarifying the main points.
Good reading!
What is the best way to invest for retirement?
There isn’t a better strategy to invest for retirement because every reality has its own set of considerations that need to be considered.
To make sure the investment is as secure and successful as possible, it is crucial to heed a few advice. Among these attributes, we emphasize:
- Discover the investor profile;
- Diversify investments;
- Develop planning and discipline;
- Have a purpose.
The first step is to find out your investor profile. There are different types, but in general, they can be divided into conservative, moderate and bold.
The conservative style values security over a high rate of return. Therefore, it prefers fixed-income investments, which are safer but have low returns.
The bold profile, on the other hand, opts for high returns in a short space of time, even if this makes the investment a little less safe.
The moderate profile moves between these two profiles mentioned above.
The next tip for investing for retirement is to diversify your investments, regardless of what type of investor you are.
Diversification is good for both increasing the security of your portfolio and its profitability. Real estate funds, stocks, CDBs, government bonds and cryptocurrencies can be the assets chosen for this diversification.
We have talked about planning and discipline before, but it is important to highlight these issues for those who want to have a comfortable and secure retirement.
Planning is acting with the guidance of a plan. A plan, in turn, is an indication of how to reach a goal through tasks. Those who plan to increase the chance of success.
Every plan requires discipline, but one is directly related to the other. There is no formula for acquiring discipline, as it is the result of daily effort.
Finally, we highlight the importance of purpose, which also contributes to the maturation of the discipline in the medium and long term.
The purpose is not retirement itself, as it is just a means to an end.
The purpose is usually: to buy a house in the countryside to live in old age; to travel the world; to leave a good inheritance for the family, etc.
Think about what purpose or purposes you intend to achieve so that the entire process is optimized.
How much money is needed to give up a job?
Again, this question varies from a few answers that must be given by you.
What is your purpose in retiring? What do you want to do with your earnings when you stop working? What income do you consider good enough to stop working? Where do you want to live?
In addition, it is important to answer other questions, such as: do you already own a property in your name? Do you have access to retirement benefits from the INSS? What are your investments and their liquidity? All of these questions should be answered first.
However, let’s give an example. Anyone who manages to save 1 million can have a return of 7.44% per year, or 74,400 per year or 6,200 per month.
It is worth noting that this amount is exempt from income tax, regardless of the amount invested.
Even though the amount is considerably average for the income level in the country, we emphasize that it is still necessary to reinvest part of the amount, in order not to lose purchasing power over the years due to inflation.
Other alternatives can be sought, such as fixed or variable income investments, as well as investing in real estate, land, NFTs or cryptocurrencies.
What to do to retire with more than the minimum wage?
Again, the secret is to diversify investments and not depend solely on the INSS.
To do this, you can invest in different assets, such as fixed or variable income, or even save money in savings — although it is not the best type of investment, it is better than not saving or not investing.
Another alternative is to take out a private pension plan. There are different options and it can be done individually or collectively.
Some unions and companies have agreements with banks and contributions become more attractive. Analyze your possibilities to make the best possible choice.
Is saving for retirement worth it?
Yes, it is worth it. We know that thinking and planning for the long term is difficult, but it is always worth it. Because, invariably, tomorrow always comes.
And those who prepare for it reduce the chances of facing life’s uncertainties. And more than that, they anticipate them to enjoy the best that life has to offer.
The tip is to start slowly, but always with a goal in mind. Don’t compare yourself to other people, just try to improve your planning and focus every day.
At the end of the process, the effort will be the guarantee that the purpose was fulfilled.
Therefore, saving for retirement is essential to having a peaceful old age and taking advantage of this time to, do more than just live with dignity, make your dreams come true!
