Yahoo Finance Robert Kiyosaki: 4 Retirement Planning Tips He Swears By
Common retirement planning concerns include covering increasing healthcare expenses, supplementing your Social Security and not outliving your savings. Along with knowing how much to save, you must carefully pick and allocate investments for more financial security.
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Robert Kiyosaki, author of the bestseller “Rich Dad Poor Dad,” offers money advice on everything from investments to entrepreneurship. In a post on his “Rich Dad” blog, he shared these four tips for a lasting retirement plan.
1. Don’t Lose With Cash
You may feel tempted to keep a lot of cash on hand to protect yourself against market downturns. However, this could be a bad financial move for a sustainable retirement plan.
Concerned about the dollar’s viability, Kiyosaki cautioned about how inflation can impact your savings. He suggested, “Rather than save cash, keep your liquidity in assets that can be quickly liquefied and that hedge against inflation, not lose value with it. That can be gold, silver, oil, etc.”
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2. Diversify the Real Way
When you diversify your retirement portfolio, you might focus on types of traditional investments, such as mutual funds, stocks and bonds. While this can balance out some risk, you can also look into alternative investments to protect your retirement savings.
“True diversification involves investing in as many of the five asset classes as possible: paper, real estate, commodities, business, and cryptocurrency,” wrote Kiyosaki in a related blog post. Be sure to do your due diligence, since these investment options all have varying returns, risks, potential fees and tax implications.
3. Invest To Generate Cash
When considering health issues that can arise in old age, you might feel tempted to get a long-term care insurance policy to protect yourself. But this coverage can come with unaffordable premiums and limitations, and there’s no guarantee you’ll eventually use it.
Kiyosaki advised, “Rather than hand your money over to an insurance company or stock it away at a zero return for an old-age annuity, begin now to invest in assets that will provide the cash flow you need to cover your expenses as you grow older.” An example would be receiving ongoing rental payments from your investment property.
4. Minimize Your Taxes
Taxes on investment income will only cut into your overall return, so you should aim to reduce or avoid them. Kiyosaki suggested using before-tax dollars to buy investments and taking time to learn about tax strategies.
Another move is to hold your investments for over a year so you’ll pay the long-term capital gains rate, which will likely be lower than your regular tax rate. You should also explore tax-exempt investment options, including municipal bonds and health savings accounts.
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