1. Know your Needs
The first thing you need to do before investing is to actually analyze your needs. If you will not require a lot of money after you retire, you do not need to make big investments. If your needs are going to cost quite a lump sum of money, you may need to make bigger or more investments.
2. Know your Investment(s)
Rather than following market trends or investing what someone tells you to invest in, make sure you know your investment. Analyze the market value of your potential investment and study up on projections. Before making an investment, make sure you have completed your homework. Make sure you know what you are investing in.
3. Think Low-risk
The key to investing in your retirement is to make sure your investments are low-risk. You may get a higher return with high-risk investments, but you need to remember that these investments go towards your retirement. If the investments go down the drain, your retirement could as well. Hence, if you are planning to invest in something, make sure that it is a low risk investment. This increases your chance of getting a decent return without losing your investment.
4. Choose the Right Savings Plan
Many people choose to invest in savings accounts. Technically, they are actually savings because you are tying up your money in one place in hopes of getting an increased return. If you do choose to put your money into a savings account, ensure that you get the highest interest rate possible with the lowest required monthly deposit. Not only will you get a sizeable return, you won't have to risk receiving a penalty for not meeting your monthly deposit.
5. Think Long-term
Considering that your retirement is a long time away, you have to think about long term goals. You do not need to rush into any investment if it does not make sense. You can always set money aside every month until an investment makes sense. Because your primary aim is a happy retirement, your investment will have to be a long-term one. Not every investment is the same and the reasons for investing are driven by your needs. Make sure that you keep the above 5 points in mind before making an investment for your retirement.
Allan has recently opened a Ubank SMSF to manage his retirement savings and he has been looking at ways to maximise his returns. To learn and exchange with others, Allan has been regularly contributing to personal finance blogs over the last 2 years.