Most retirees have big plans for their lives after then stop working. Whether, it’s buying a vacation home, travelling or opening a small business, these plans usually require a healthy retirement fund. Yet, one of the biggest fears of any retiree is not having enough money to live the lives they envisioned for themselves after they stopped working. This is especially true when one considers that people are generally living longer than ever before. Understandably, therefore, retirees have to find a way to make their savings go the distance. Of course, the simplest solution to a retirement deficit is to just save more money. However, saving more money depends on a number of factors such as salary and the point at which you begin saving. It also helps if you are able to add income from sources other than your salary such as bonuses, windfalls and freelance income. What happens if none of these factors work out for you, what is your recourse then? Here are a few ways to maximize your retirement money after you’ve stopped working.

4 Ways to Make Your Retirement Money Useful

Real Estate – Investing in real estate is a great way to maximize the money you receive after retirement. Many retirees choose to purchase a second (or third) home which will become an income property. If you decide to use your IRA to purchase property, keep in mind that you won’t be able to purchase any residential properties. You will have to purchase a business property. Real estate investing can be somewhat tricky for those who don’t know much about it. It is still considered a risk. You should only invest in a property if you can do so comfortably and only if you can afford to pay the mortgages if the building remains unoccupied.

Immediate Annuities – An annuity is basically an insurance product that provides individuals with a guaranteed income for the rest of their lives. It has become a popular strategy for investors who want a steady stream of income after retirement. In an annuity, individual makes an investment which in turn makes payouts at a later date. Normally, annuities require individuals to make regular contributions throughout their work lives. However, immediate annuities require individuals to pay a lump sum in order to receive a lifetime of income. Individuals can choose between a fixed annuity that pays them a set amount every month, perhaps for life. However, depending on how long you live, decades of inflation can your mean that standard payments no longer hold the value they used to. Individuals can also choose a variable annuity that can increase or decrease depending on how well the underlying investments perform. One of the drawbacks of annuities is that it takes a large initial investment in order to guarantee a small monthly sum. In addition to this, you generally can’t get your principal investment back if you change your mind. This also means that there is typically no death benefit. If you pass away within a few years of signing the agreement, your family does not receive any more payments.

Stay Invested Even as a Retiree – You shouldn’t let your retirement be the reason for cashing out all of your investments. However, as retirees age they should move away from stocks and towards bonds as a way of mitigating risk. An often-used rule used in investing suggests subtracting your age from 100 and using the remainder to dictate the percentage of your total retirement fund that should comprise of stocks. Thus, if you are currently 50 years old, only half of your total retirement fund should be made up stocks. Yet, with people generally living longer and spending a greater portion of their retirees may need to subtract their ages from 110 or 120 to get a better idea of their investment strategy. However, whatever strategy you use it is important that you do not cash out all of your investments upon retiring.

Peer-to-Peer Lending – The yields from bonds can be a good way for retirees to continue receiving an income. However, during periods of low interest rates, bond yield tends to be somewhat low. The alternative to low yields is investors accepting more risk. Understandably, taking age into consideration, many retirees do not want to take on any unnecessary risks. This is why peer-to-peer lending has grown in popularity as an alternative to riskier investments. While it does incur more risk than the average savings account, it incurs less risk than investing in the stock market. Peer-to-peer lending allows persons to give loans to individuals. Individual lenders can also pool their loan funds which lowers the risk to each participant. To further mitigate risk, lenders can rely on credit scores to better inform their loan decisions. However, lenders do not have to go out on their own to look for borrowers, since there are companies that can help them achieve this. Lenders can choose to spread their money among many different borrowers so as to lower their risk. However, lenders should remember that peer-to-peer lending is still a risk and they should completely understand the terms and conditions before participating.

The most important feature of having a retirement fund is having enough of it. Running out of money is a fear that many retirees harbor and rightfully so. No one knows for sure how much retirement money they will need since no one can predict how long they will live. Thankfully, however, there are many ways of maximizing your funds. The first step towards a safe retirement fund is to closely monitor it. Taking positive steps before you actually retire can be a tremendous help towards having a stable retirement fund. In order to get your retirement money to work for you it is important that you review your fund situation regularly. This way, if you discover a deficit, you will be able to take action with relative swiftness.