One major question every retiree has is, “what about investments after retirement”. Investments should not stop even after you retire. In fact, you can shuffle your investments in such a way that your income would not be affected even after retirement.

After retirement, you will have all the free time in the world, and you would want investments that would allow you to enjoy life while helping you keep up with your medical expenses.

Many options are available to retirees who want a steady income after retirement.

Retirement funds
Many mutual funds are designed around retirement. These retirement income funds allocate money by using combinations of bonds and stocks such that a steady monthly income can be generated. With retirement income funds, the principal amount is safe, and only monthly dividends are disbursed. Then, there are target-based retirement funds such as the Vanguard Target Retirement Fund, which allocates 37% of the fund to stocks and the remaining to bonds and cash.

Bonds
Probably one of the safest instruments, bonds come with quality ratings. One can classify bonds in the order of priority as short term, mid-term, and long-term bonds. Bonds come with a maturity date and a rate of interest. However, the interest rates on bonds tend to fluctuate. If you are looking to hold on to bonds for a longer period, then interest fluctuations should not bother you.

Real estate
Real estate rental does not categorically fall under investment, but it does provide steady monthly income from the rent. Investment in real estate comes with its share of expenses such as maintenance, taxes, and other overheads. However, it does guarantee steady income.

Total return portfolio
This portfolio comprises a mix of stocks and bonds with a focus on the long term. If your targeted annual rate of return is 10% to 20%, go for the total return portfolio. However, you must be flexible enough to change the allocation or make practical decisions based on market conditions to maintain this return rate. With this portfolio, you can enjoy your income through a systematic withdrawal plan. The purpose of a total return portfolio is to generate steady income without selling stocks in hand.

Annuities
Annuities are more of an insurance as opposed to investment. They are long-term investments and are best suited for retirement. Under immediate annuities, the investor invests a lumpsum amount in exchange for a steady income for life, and some investors start receiving payments as soon as 30 days after the investment. However, with annuities, there is the risk of inflation, which can affect your income. An investor can choose the term of payout, such as joint payout for married couples, single life payout, or 10-year payout.

Moreover, there are other safe investment options, such as money market accounts, certificate of deposits, and close-ended funds.

Investments for retirement work well only if they are started well before the retirement period. During retirement, one must be prepared for any unforeseen expenses. Early retirement investment planning can help you avoid facing such a scenario.