Once you retire, your focus shifts to sustaining your income for the years to come. You wouldn’t want to outlive your savings, or let’s put it the other way round- it would be nice to have a decent chunk of money to spend in the silver years.
You can consider, trading is the best investment options post your retirement. If you choose the right stocks in your portfolio with precision, you can have all the luxuries in your retirement period that one can only hope for.
In order to invest, you need to open a Demat account. Let’s first understand the what is Demat Account and how it works,
A Demat account is basically your personal digital wallet that holds all your financial securities for you. The securities being referred to here may be shares, bonds, mutual funds, exchange-traded funds, etc.
Let’s assume you place a buy order on a particular stock. The shares of that company would get credited into your Demat account. If someday you place a sell order on these shares, they would get debited from your account. It can also be referred to as your repository.
Let’s understand how trading will secure your future post-retirement.
(i) Time Value of Money
Let’s say you have generated enormous wealth and kept it in a savings account. This is the money you have kept aside to help you sustain your retirement needs. An important concept to note here is that the same amount of money can mean a lot more or a lot less, depending on your era. For instance, $1000 may mean a lot today, but its value may depreciate, and the same $1000 could become almost nothing the next day. You cannot say with utmost certainty that the income you have saved now would have the same value 20 or 30 years down the line – which is also a typical time horizon you would be looking at post your retirement.
There is a need to stay in line or ahead with the time value of money by investing your money.
Now let’s assume you decide to trade in high-growth stocks. You beat the market and stay ahead in the game, making more money. Since you are already beating the market, you should be comfortably placed at beating the time value of money as well.
(ii) Inflation
Online trading is an essential tool if you want to beat inflation. You are all set if your portfolio consists of a few high-growth and some dividend-yielding stocks. The dividend-yielding stocks would guarantee the fixed income you are looking for, and the high-growth stocks would help keep you over and above the market conditions. Your portfolio would thereby give you steady returns and would also account for inflation.
(iii) Unexpected Expenses
Accidents don’t come knocking! It would help if you always had that extra bit of margin on your savings to facilitate any emergencies that may arise. The high-growth stocks on your portfolio will ensure you have the extra bit of liquidity to take care of such situations.
What About Pension Fund Managers?
Nobody wants to miss a chance to get their profits from the stock markets! The Pension Fund Regulatory and Development Authority (PFRDA) has agreed for Pension Fund Managers to enter into an upcoming IPO. Pension Funds, which are not a part of the Futures and Options segments, can now participate in the NSE-200 and BSE-200 companies. Other than the IPOs, the PFMs can also invest in for-sale securities and follow-on public offerings.
The Final Word
If you are looking for income stability and growth post your retirement, build your portfolio, analyze, strategize and start trading!
