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How to make old life more affluent
China Securities Journal Huang Kehong
How to make old people rich, and then have more choices for their own life? The American Retirement Financial Advisor tells you that the way to reduce your old-age concerns is to switch from saving for retirement to generating income through retirement through financial arrangements.
In the "Pension Portfolio" book, American pension investment planning expert Michael J. Zwecher put forward some practical investment suggestions:
First, pension financing is different from traditional wealth management. The author believes that the traditional financial planning focuses on weighing the risk return and assessing the customer's risk tolerance; while the pension planning needs to focus on ensuring the customer's future basic benefits through financial management arrangements. “This does not mean that there is no need to completely avoid risks, but rather that we should conduct risk monitoring and diversify risks when appropriate.”
The second is to focus on inflation. Inflation is the silent killer of retirement plans. There are two ways to reduce the impact of inflation: one is to build a portfolio that is denominated in nominal amounts and consider the expected inflation; the other is to buy a portfolio that is adjusted for inflation based on actual amounts.
Stocks and physical assets are often used as inflation protection, but investors need to understand their uncertainty. The return on some physical assets is both consumer and financial. Generally speaking, the greater the return on consumption, the lower the financial return. For example, stamps, coins and artworks are mainly based on consumer returns.
The third is to determine the "guarantee consumer demand." Determining the cost of retirement is more important than focusing on retirement income. First, you need to determine the consumer needs that are most in need of assurance, and then plan for this to ensure the safety of this part of the demand. On average, people spend about 70% of their pre-retirement income after retirement. Therefore, each family needs to budget for its own situation, which is divided into basic consumer demand and what is “desire expenditure”.
The fourth is the allocation of risk assets. In traditional financial planning, risk assets are the most important part of the portfolio. In the pension portfolio, in addition to ensuring the need for living, it is also necessary to retain room for increased income. By separating the guaranteed investment portfolio, the risky assets have a tolerance for possible losses, and reasonable planning for take profit and stop loss is also required.
People will spend decades saving money for the elderly, and once the retirement phase comes, they will naturally be afraid to see their deposits reduced. Therefore, pension planning is one of the most important tasks in life. We need to shift from saving for retirement to generating income through retirement through financial arrangements.
Editor in charge: Li Limeng RF13188
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