Investment options for seniors.

1. Investment
options for
Seniors

2. Communicating investment options to seniors can be difficult
because of the perception surrounding investment at a late age.
Primarily, the perception is that investment is a long-term tactic to
generate further income—not a short-term option. And seniors
worry that if they try to invest in stocks, they run a huge risk of
losing a lot. Many seniors today have been saving for a good
portion of their lives—and they expect Social Security—so they’re
less likely to think about investment opportunities later in life.
Investment Options

3. The Process is Threefold:
● Communicate to seniors that it’s not too late to make money
through investments during their lifetime; there are
investments that can pay off within three to five years.
● Communicate the idea that they can use their nest egg now to
make investments that will help their children, successors, and
trusts even more if the right investments are made.
● If they don’t think they have the money for investment, there
are steps they can take to change that, including selling their life
insurance policy.

4. The Process
As we discuss further options, each one will fall into one of these
categories. Because, in the end, your goal is to show seniors how to
be responsible with their finances in both how they spend it
now and where they invest it for the future.

5. Real Estate Investment Trusts

6. Real Estate Investment Trusts
A Real Estate Investment Trust, or REIT, is a way of investing in
income-producing real estate without tying up money long-term.
Investing in a REIT allows for the opportunity to invest in real estate
by purchasing stock. The investor shares a portion of the income
generated by the real estate that they invest in and can buy and sell
their shares as easily as they can with any stock.

7. Real Estate Investment Trusts
REITs allow for a return on real estate without having to buy, own,
or manage properties. REITs can be found on major stock exchange
markets, but investors can also consider options like public, non-
listed, and private REITs. These opportunities will commonly come
in the form of Mortgage REITs or Equity REITS. Mortgage REITs can
be through both commercial and residential properties. With a
Mortgage REIT, an investor is purchasing all or a portion of the
mortgage or mortgage securities of a property.

8. Equity REITs work with properties that accrue income through
collection of rent and the sales of the properties.
On average, REITs perform better than the S&P, Dow Jones
Industrial, and NASDAQ Composite. However, there is always the
chance that they’ll be outperformed by other investing methods
such as high-risk investment—but those are less likely to
produce.
Real Estate Investment Trusts

9. Bonds

10. Bonds
According to RidgeWorth Investments, “Short-term bonds, best
defined as fixed-income products that mature within one to three
years, can be an attractive solution given today’s historically low
yields and potential for rising interest rates.” While in the past few
years short-term bonds have been reasonably well recommended,
some investors advise against short-term bonds and instead
advocate for longer investment periods. But if your client is a
senior, they might not want to.

11. Bonds
Seniors may need their money in a year or two, so it’s pointless
for them to get wrapped up in an intermediate or long-term bond
situation. Short-term bonds also allow for seniors to move their
money around easily to other investment opportunities.

12. Bonds
Short-term bonds aren’t right for everyone, and if a person has a
choice, they might be better served by a longer-term investment.
However, if they want to invest money for a year or two and
then use it in a different way, short-term bonds are generally a
good option. If a person has short-term liabilities, it means they
should purchase short-term bonds.

13. Inflation
When a person is near retirement age, it’s not the time to make
risky investments. Having said that, they can’t be too
conservative. Sometimes, if investments are too conservative and
their interest rates are too low, they can actually lose money.
Some interest rates on savings accounts and CDs are so low that,
after inflation, they won’t actually make any money. This is the
risk of investing too conservatively and not understanding the
market completely.

14. Inflation
While a conservative investment sounds good in theory, you
need to be the authority on the increase in inflation, the rate of
incremental growth of an investment, and the age and health of
the investor.

15. Inflation
Encourage clients to invest in things that are guaranteed or
almost guaranteed to get a good return. The years they have to
make riskier decisions are behind them, but that doesn’t mean
they are without options. There are more ways to invest than
thinking about risky versus conservative investments.

16. Selling Your Life Insurance

17. Selling Your Life Insurance
If a senior doesn’t have the time or money to invest in something
like stocks, REITs, or short-term bonds, they can consider selling
their life insurance policy. The life settlement market, which is
the market for people interested in selling their life insurance
policies, has been around for over 20 years. While it is a thriving
investment market, many people are unaware that they can sell
their life insurance policy and get the money they need for
retirement.

18. Selling Your Life Insurance
Life settlements happen for both permanent and term policies,
which allows for more opportunities across the board. Term
policies are only eligible if they are convertible, which means
they can be converted from the term policy to a permanent,
universal life, or whole-life insurance policy.

19. Selling Your Life Insurance
Most people consider life insurance policies to be something
they won’t see any return on. The policy is there in the event
something happens to them, but what those people don’t know
is that if they qualify for the life settlement market, they can sell
their policy and get a return on their investment that they would
otherwise miss out on. While this may sound like a wonderful
opportunity for everybody, there is a strict qualification process
one must go through in order to sell.

20. Communicating Expertise
As an advisor, your clients rely on you to be an expert on these
matters and communicate to seniors in a way that shows them
every choice they have. You can encourage them if you think
there’s an option that’s most beneficial to them depending on age
and health and previous investment. More so, you can provide
them with the pros and cons of each of their investment
opportunities. And that’s key: to communicate to them that they
still have investment opportunities—but now their options are
simply different than when they were younger.