Some people make irresponsible and quick decisions concerning their pension money without taking their long-term financial goals into consideration.
Before making a decision, here are some important factors to consider:
Take an honest look at your financial situation and establish what your goals are. Get the facts about a specific investment opportunity, even though there are no guarantees, you will be able to manage your money more responsibly.
Evaluate your risk tolerance
It is important to realise that if you decide to invest in stocks and bonds there is high risk involved. You could lose all your money or be rewarded with a greater investment return. If you are risk-averse, it is wiser to invest in safer options.
Diversify your investments
Don’t put all your eggs in one basket. By investing in more than one investment category, you will reduce the risk of losing all your money. This way if one investment returns fail, you will be in a position to limit your losses with the other investments that have yielded a better return on your investment. The other side of the coin is that if you do not include enough risk in your portfolio, your investments may not meet your retirement goals. With many retirees living beyond the age of 90, it is a good idea to invest at least some of your money in assets that will grow over time likes shares and property. This will help your capital to grow and keep up with inflation
Avoid fraudsters who often convince potential investors that their investment opportunities are legitimate and lucrative. Always take your time before making an investment decision.
Consider getting good financial advice
Depending on your circumstances, you may want to seek professional advice from a trusted financial planner.