Techniques for Managing Money After the Retirement and How to Grow on an Investment
Financial planning does not come to a stop when young people have accomplished their goals, but it should be well-constructed and comprehensively planned in their post-retirement years. Having insufficient money in a bank account, spending it without giving a second thought, or any unforeseen necessity, all these situations can cause a money shortage before an expected time.
However, investing in retirement life is different from investing before retirement because the monthly salary is no longer provided like in the working age, so it raises a crucial question “How do we manage a large amount of money collected throughout working years for the most out of it?”
Before starting to answer the problem, it is suggested to revisit your goals and current situations. For example, At what age will you retire? How much money do you need for retirement? How much money do you have for retirement now? What is the way to reach the goal? Read more in the article. “If I could turn back time, I would save money.” If I could turn back time, I would save money. | Principal Asset Management
In addition, when it comes to the beginning of post-retirement, it is recommended to break your savings down into three parts.
1. Everyday expenses: Try to estimate how much we should be spending per month and then estimate as annual expenses, so the amount of money that we have to withdraw becomes clear for each year to be able to use in daily life. Thus, the rest money can be managed for future parts.
2. Reserved for emergencies: Although we have various types of insurance, including insurance, life insurance, health insurance, we should have an emergency fund separated at least 3-6 times the monthly expenses for an illness that is not covered by insurance or in case that the hospital expenses cost more than expected. This amount should be allocated in a place where it is easy for an immediate withdrawal, such as savings or fixed deposits.
3. Money for investment: This is a remaining part of everyday expenses and the emergency fund. Invest in an investment portfolio according to the different targets as wanted. Apart from making savings grow, some investment portfolios are specifically designed for lifestyle, social donation, and inheritance for the next generation.
Once we have allocated the money for the investment, the essential point is to have a portfolio that suits you. It is crucial to focus on maintaining the principal, and the returns should be positive above inflation. Therefore, the risk should be diversified to various investments in a variety of assets, with dividends and interest payments regularly by spreading investments in different types of assets. However, each category will have a corresponding proportion according to the goals and the level of risk that can be taken.
- Low-risk assets; Savings Deposits, Money Market Funds to have cash available which can be withdrawn in a short time
- Medium-risk assets; Government Bonds, Corporate Bonds, Medium-Term Fixed Income Funds, Property Funds to increase the return on the investment portfolio
- High-risk assets; Equity Funds to increase the return on the investment portfolio
Read more about investing in mutual funds with Principal at https://www.principal.th/th/mutual-fundth
Finally, when creating a portfolio, it is highly recommended and emphasized to regularly check your investment portfolio to ensure the effectiveness of the investment plan and flexible financial status throughout the life of retirement.
For more information, please click here https://www.principal.th/en/provident-fund
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Disclaimer: Investors should understand product characteristics (mutual funds), conditions of return and risk before making an investment decision.
Ref: https://www.set.or.th/set/financialplanning/lifeevent.do?name=lifeevent…;
