Prematurely losing a loved one is a terrible situation to suffer, and one that causes problems far beyond the immediate grief. Partners and spouses often rely upon one another to fund their retirement, and to meet significant payments that are not possible alone. In the event of an unfortunate death, however, this retirement fund can easily disappear, and the life insurance payouts can be the only fund available to you. This article looks at how you can use the money to solidify your position, and make plans for the future and for retirement.
Clear the Debts
The first thing to do once insurance payments have been received is to settle debts, wherever possible. If you live in a home that requires income, from both yourself and your late partner, to meet the payments, then this debt needs to be settled as quickly as possible. By settling this debt, you will hugely relieve a burden on your shoulders that can allow you to earn and save for retirement. Struggling to meet these payments each month, however, will leave you with little to save for the future, and for retirement.
Invest the Remainder
Once you have cleared your debts and made it possible for you to enjoy a reasonable level of comfort, it is important to look at how you can increase the value of whatever remains. Simply placing the money in a bank account, for the future, will keep the money safe, but it will stifle its growth. By investing the money, however, you can enable it to grow at a more significant rate, and you can also ensure that there is a decent value added each year, to make the money go further into retirement.
There are two significant ways to invest for growth:
1. Property investment –Buying an investment property is an excellent way to increase the value of your savings, and allow the money to work for you. Whilst this may require going back into debt again, when you are investing in a second property, you can manage it so that all payments are covered by tenancy costs. Renting out a property that you own means that you can use the income generated to increase the value of your wealth. Over time, you will own the property outright, and you can either sell it, or look to continue the tenancy for profit.
2. Stocks and shares –Investing in stocks and shares is another very good means of increasing the value of your savings. Stocks and shares are a somewhat more volatile market, but as long as you consider the shares as the purchase of part of a business, then it can be easy to recognise economic stability. Stable shares will increase in value over time, and will offer you significant dividends as they do. This can be a very rapid way to increase your position, and to prepare for retirement.
When planning for retirement with a significant insurance payout as your fund, the most important step is to be cautious and sensible in your investments. Diversifying your investments, and being aware of market trends, is important to ensure that you make a profit on investments and avoid losing everything.