Regular premium retirement investing
Saving for retirement should be a lifelong pursuit – setting aside regular sums to give the greatest chance of your investments working as hard as possible for your later years.
It pays to make salting away even a small amount each month into an investment plan a priority, as this can make a huge difference to your pot over the long-term. So how exactly how does regular investing boost your wealth?
For a start, by investing regularly you smooth out the peaks and troughs of the market. You buy fewer shares when prices are high and more when they are low. So you do not have to worry about the right time to invest, and this can give you valuable peace of mind.
You could choose to pay premiums monthly, quarterly, half-yearly or yearly depending on your circumstances and the investment you pick.
Income reinvestment for growth
Picking investments that pay out dividends may considerably boost returns if you choose to reinvest this income. It will boost your original pot, providing a greater base for it to grow in value. Dividends magnify the impact of compound interest, which Einstein called a ‘wonder of the world’ – and can help build long-term wealth.
Even during volatile stock market periods, income reinvestment makes it important to stay in the market. When markets fall, stocks continue to pay out dividends. If you can hold your nerve, your patience is likely to be rewarded over time.
Building a portfolio
This is an area where some financial planning is likely to be required. There is a growing range of investment options on the market for expats, and this increasing complexity makes it essential to get the right advice.
You could spread your money among smaller companies and emerging markets to increase the chance for growth, albeit at a higher risk, right through to income funds and regular monthly premiums into savings accounts. There are also plenty of other options. Once you have decided on your strategy, you will also need to consider in what proportions you wish to spread your money among your investments.
The right mix of investments will depend on your attitude to risk and the timeframe you have available until you hope to retire. You will also want to ensure any portfolio is sensibly diversified in cost-efficient investments.
Your goal should be to build a portfolio of investments that suits your needs, while also reviewing progress on a regular basis.
Choosing the right plan for investing offshore
Picking where to put your money takes some consideration. Some plans may come with tax benefits for inheritance planning, while others will offer particular investment choices. Tax is one of the biggest considerations for expats, wherever you plan to retire. This impacts on all aspects of your financial affairs, and each jurisdiction comes with its own rules.
This is why it is important to speak to an adviser to find out which is the most suitable investment for your retirement, depending on where you plan to be at that stage. They can explain the product detail, including charges and exit flexibility, which will ensure you understand where you are putting your money.