Retirement Investing Tips

Online Stock Trading - Retirement Investing Tips

Worried about Retirement? Check out Treasury Inflation-Protected Securities

In the current harsh economic times lots of people won't be retiring as soon as they thought. Lots of us will have to work on when we should be relaxing in our beach-front retreats with an assortment of bimbos, floozies housekeepers and health care specialists. But let's face it - it probably ain't going to happen.

So if you are wondering what to do about retirement investing then the place you need to look, if you are in the U.S., is : Treasury Inflation-Protected Securities, or TIPS i.e. bonds issued by the federal government that are guaranteed to keep pace with any increases in the CPI (consumer price index) as calculated by the government.

TIPS are a wise investment but they do have their disadvantages. For example, in the event of deflation (considered unlikely at the moment), the value of any TIPS will fall. And in an environment where inflation is low, your TIPS earnings will be low too. However, if there is persistent deflation, you are at least guaranteed to get back the principal you invested.

Another issue with TIPS is that the government inflation rate is not guaranteed to keep pace with your "personal rate of inflation." Your age, lifestyle, and location, cost for transportation, housing, energy, or health care, will determine your own rate of inflation which may rise much faster than the average.

For this reason you must also diversify by creating a broad portfolio that includes stocks, bonds, and other investments.

Many investment advisers agree that diversification is the best strategy, even if you are a conservative investor.

The key is balance. Equities need not be a large percentage of your portfolio unless you want to profit from any rebound in the stock market. For retirement investing, retirees are advised to focus on Treasuries and high-quality corporate and municipal debt.

With regard to equities, investors could focus on the energy or basic materials sectors, which should offer a better hedge against inflation than other shares, at least according to Joe Terranova of Virtus Investment Partners.

Investors are also advised to ensure they have plenty of cash, without dipping into long-term investments.

You also need to watch all your risks. Do you have enough insurance ? Health insurance and long-term care insurance will be particularly important.

If you are fortunate enough to be very wealthy, you should also consider litigation insurance to make sure your fortune is protected from litigation.

Above all of course whatever your financial situation you need to take charge of your own affairs, double-check any advice you are given and carry out your own research.

Fortunately, thanks to the Internet, it has neven been easier to find information whether on retirement investing, health insurance, medical insurance or retirement planning. The judicious use of an online retirement calculator will also make it easier to work out just how much you can expect to have when you retire.
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