How to optimise your spare cash in retirement


In days gone by, savings accounts were the best way to build wealth for your retirement.


50 Plus reports that this is not necessarily the case in the current economic climate, however, as a lack of real wage growth and the rise of marginal interest rates has left an estimated 97% of UK savings’ accounts losing money in 2017. This means two things for those approaching their retirement. Firstly, it is becoming increasingly difficult to save money through traditional savings vehicles in the modern age. Secondly, those who have progressed beyond the current retirement age are being faced with the prospect of extending their careers and working for longer.

Beyond savings: 3 ways to optimise your money during retirement

With this in mind, here are three ways that retirees can look to optimise their income during retirement, without committing their funds to low-rate savings accounts.

1. Become an Equity Crowd-funder

The majority of modern pension plans allow users to withdraw 25% of their funds in a single, lump-sum, which in turn can be leveraged to secure investments and generate an even greater return. Precisely how you use this money is up to you, of course, but if you really want to make it work for you there are plenty of viable options. You could take a percentage of your income to become an equity crowd-funder, for example, as you seek out technology start-ups and small businesses that are actively seeking investment. These investment opportunities are accessible and rewarding, while they also deliver a secure store of wealth in company shares and fixed equity.

2. Consider the Forex Market

If you are loathe to use your lump sum to drive investments, you may want to consider alternative markets that allow for smaller, but more frequent, deposits. When considering such markets, the key is to look for liquid, derivative-based entities that can deliver a high return, while also enabling you to profit regardless of the economic climate. In this respect, trading currency through the forex market may be the best option. Outlets such as FXPro even allow you to access the forex market online and in real-time, ensuring that you can take advantage of short-term trends and make quick, informed decisions. This is crucial given the relentless, 24-hour nature of the market, where price shifts can occur suddenly and throughout the day. If you do enter this market, however, you must strive to build knowledge beforehand and keep in mind that you can always lose more than your original investment. To help achieve your goals, considering opening a demo account and trading in a simulated market environment before taking the plunge for real.

3. Seek out Dividend Investments

For those of you with a minimal appetite for risk and a desire to gradually accumulate wealth, pursuing dividend investment opportunities may be the best course of action. This is a vehicle that allows you to invest in blue-chip stocks that have sustained consistent growth over a period of 10 to 15 years, delivering regular, incremental dividends on a quarterly basis to investors. While the returns available here are not huge, they are extremely low-risk and can deliver a steady stream of income throughout the year. This can make the difference to your pension plan, helping to bridge the gap between making ends meet and achieving more aspirational, fiscal goals.

(Article source: 50 Plus)

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