Team Lendermarket

Investing for retirement: 5 strategy elements you have to keep in mind

Being able to live a comfortable life when you’re older is one of the main reasons why people put money aside and are investing for retirement. If that’s also one of your main drivers to investing, then this article is for you.

We’ll share 5 strategic elements you should keep in mind when investing for the higher age, so you can reach your desired goals.

Is my retirement goal formalized correctly?

An important factor when investing is managing expectations. It allows you to make sound decisions, and not jump for the next shiny thing, putting your saved up funds in jeopardy. 

Setting proper goals is key to this. Let’s talk about the essential characteristics of your retirement goal.

Set a specific retirement goal

Ever heard someone say as their New Year’s resolution, they “want to lose weight”? Well, that’s a commendable goal, but what does that mean? It could be 100g, 1 kg, or 1 kg of body fat with a deadline of 1 week, 1 month or even the whole year.

Don’t be that blurry with your goals, especially not when it comes to something as critical as retirement. Here are some questions to think about that will help you formulate a more specific retirement investment goal:

  • When do you plan to retire?
  • What do you want your life to look like in retirement?
  • How much money do you need for that lifestyle? (Also keep in mind inflation and prices rising)
  • Will you work partly for that money, or does it all need to come from your investment?

Set a realistic retirement goal

If you’re 50 now, have barely any money saved up, just as much make ends meet every month and want to retire at 65 imagining a dream life jetting around the world – it’s unlikely to happen.

Save yourself the disappointment and be brutally honest with yourself when setting your goal and opt for a conservative approach.

What number you can realistically reach until retirement only you can know, it depends on a couple of factors:

  • Your current age
  • Your retirement age
  • Your net income
  • Your savings rate
  • Your ability to increase your income
  • Your risk tolerance

Be sure to also factor in a buffer, in case investments don’t perform as expected, you get sick, or life happens.

Retirement investment strategy

Now let’s go over 5 strategies that can help you manage your investment for retirement, making sure your ship safely reaches its destination.

Consider higher risk investing strategies

Depending on how high your retirement goal is and where you’re starting, you might not be able to reach it with assets yielding 3% each year. In these cases, you have to consider whether you want to pursue higher risk investing strategies or make other adjustments, such as settling for a more modest lifestyle or working part-time.

The decision you’re making will likely come down to your risk tolerance as well as age. People tend to be willing to take more risks when they’re younger, as there’s more time to balance out bad decisions. 

Be passive and patient

Retirement is often a goal that’s many decades in the future, and therefore it’s hard to fathom what it means to save for it. Our brains weren’t made to understand exponential growth, which makes it easy to grow impatient when you’re seeing your portfolio grow slowly.

However, the best thing you can do is make a plan and stick to it. Keep investing, keep your money invested and avoid making any rash decisions, which might hurt you in the long term. The longer you stay invested, the better compound interest can work its magic and increase the value of your portfolio.

Bring balance into your investment strategy

“Never put all your eggs in one basket” is an adage that’s very true when it comes to investing. In order to minimize your exposure to a single asset or market, it makes sense to diversify your portfolio – that’s one reason why global ETFs are so popular. 

There are many factors that could be diversified in your investment:

  • The chosen assets
  • The currency of your investment
  • The country the company / asset is in
  • Which markets you invest into

There are also a variety of different asset classes you can consider for a diversified portfolio:

  • Stocks
  • Bonds
  • P2P Loans
  • Real estate
  • Cryptocurrency

Learn benefits provided by local government

Retirement is a huge topic as it applies to every single person. That’s why many governments offer tax-benefitted accounts to invest or even add some money to your retirement account.

Investing in tax-advantaged retirement accounts allows you to accumulate much more money much faster, as you can:

  • Invest your pre-tax instead of post-tax income
  • Pay no tax on capital gains in your retirement account
  • Get additional bonuses from your government

The benefits offered by governments vary greatly, so it’s advised to consult a local tax advisor in your country to find out what you can do.

Evaluate retirement goal and strategy once per year

When you initially set your goal, it’s probable that you don’t know all the factors yet, such as if you’re going to have a family or what the development of your income will look like.

As you’re going along the path of investing for retirement, it makes sense to evaluate your goal and strategy regularly. A good rule of thumb is to evaluate it once per year. Ask yourself the following questions:

  • If I continue at the current pace, will I be able to reach my retirement goal?
  • Is my retirement goal still valid? Or does it need adjusting because of kids / wife / divorce / health issues etc.?
  • Would I be able to reach my retirement goal sooner and retire early? Do I want to?


Saving and investing for retirement is important, to live a dignified life when you’re older. Be sure to set a specific and realistic (perhaps even conservative) goal, of how much money you’ll need when you’re retired.

Also, keep in mind that this will be your livelihood when you’re old, so pick a strategy and stick with it. If it’s well thought-through, you have a diversified portfolio and using the benefits your government offers, then be patient and enjoy the ride. 

Also, make sure to look into your retirement goal and strategy once a year to see whether there are any adjustments required or not. We wish you the best of success on your way!

Leave a Reply

Your email address will not be published. Required fields are marked *