Stocks for Secure Retirement (Part 1)
First of all, our expectations are much higher than they used to be. A dynamic retirement income has become ubiquitous in modern life. It is not enough merely to survive, for there are many new and additional financial demands for retirement incomes. It is not a matter of quality of life alone, but of longevity as well. More than a million people will be over 100 years old by 2050. A spouse now commonly outlives his or her partner by about two decades. The threat of running out of capital looms large. However, those with investing skills have less reason to worry.
Abject and total retirement is no longer attractive: the vast majority of people would now like to be active in some way after retirement. Not everyone can take to adventure sports or something equally demanding in physical terms during the autumns of their lives: investing in stocks is an eminent option!
Employers have their roles as well in making investing in stocks most relevant for retirement incomes. There is a tendency to pass the buck more towards employees, leaving them to fend for themselves with more modest pensions than in the ‘good old days’. Many large corporations are especially severe on ‘job hoppers’, reserving viable nest eggs for only the most loyal employees.
How Stocks Protect You from Financial Risks of Retirement
Retirement faces 4 kinds of financial risks-consumption, inflation, mortality, and longevity, apart from portfolio risks if one is invested in stocks. The benefits of protection which stocks can provide against consumption, inflation, mortality, and longevity, make the portfolio risks worthwhile, especially if one invests wisely and prudently.