What is Goals Focused Investing?

(3 Minute Read)

As you enter or live out your retirement years, the last thing you want to worry about is money. Even if you’ve put in the effort to save up for those golden years, it’s easy to find yourself wondering if it’s going to be enough. While pension plans, savings accounts, and social security can be a great help, it’s understandable to need another push. For that reason, goals focused investments can be a great way to generate income and make your money last. But what does this mean for the average retiree?

What is Goals Focused Investing?

When we talk about being goals focused in investment strategies, the meaning is hidden right in the name. The idea is to develop strategies based on the needs of a household or individual. Rather than trying to reach an arbitrary financial benchmark, the success of the plan is defined by meeting lifestyle goals. A financial advisor will sit down and determine what plans the person has, whether it’s property ownership, traveling, or even just a comfortable lifestyle. These could even be short term plans, like establishing a 6-month savings for an emergency fund or even paying off a debt or loan. Regardless, it is a very customizable and form-fitted style of investing that focuses on the needs of the investor.

Investment Strategies

Though there are a lot of approaches for investing, there are two that fit the financial needs and lifestyle of the retiree.

  • The Bucket Approach

In this investment plan, a retiree would divvy up their money into three accounts with different investment packages, with one usually being long-term, short term, and high-yield. The idea behind this approach is to diversify and use each one for different needs in retirement. The long-term bonds can be used for financial security, while the short-term investments provide living expenses and day-to-day needs, and the high-yield stocks to grow your nest egg and make even more money.

This is a far more conservative approach to investing, one which aims to simply match living expenses by utilizing fixed-income investments. This plan will be based around a year-by-year need for your finances, so setting up a budget and list of expenses is an important way to get started. You’ll need to figure out the difference between your social security and expenses to determine the bottom line necessary for investment income. After you’ve established the benchmark, it’s common to purchase corporate bonds that will mature after one year. Each year you’ll do this to plan for the following 12 months, thus securing your financial standings.

The Life Settlement Option

While these goal-focused investment strategies are a great way to grow your money, you may already have valuable investments you didn’t even realize. Did you know you can sell all or a portion of your life insurance policy for more than the cash surrender value? This includes term life insurance policies as well and is called a life settlement or viatical. Contact Life Settlement Advisors if you’d like to learn more.

Leo LaGrotte
Life Settlement Advisors
llagrotte@lsa-llc.com
1-888-849-0887

Case Study: Howard’s wife passed away last year and he no longer needs his term life insurance policy. Howard planned to let the term policy lapse until a friend told him he might be able to sell it. Howard sold his life insurance policy and used the proceeds to pay off a few medical bills and supplement his retirement.

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