What Is Crash Proof Retirement? 

Making plans for a comfortable retirement is very important.

When you reach retirement age you want to be able to live a happy and fulfilling life and ensure that all your needs will be met. But how can you do this? 

What Is Crash Proof Retirement

With rising inflation rates and an unpredictable housing market it can be a challenge to ensure that your pension plan is going to provide you with the retirement that you deserve.

This is where crash proof retirement comes in. 

But what is crash proof retirement? Does it actually work? Is it a good choice for you?

If you want to know more about crash proof retirement then you are in the right place.

We have put together this guide to tell you everything you need to know about crash proof retirement, so keep reading to find out more. 

What Is The Rule Of 100? 

The rule of 100 is very important for understanding crash proof retirement.

It is a simple way to figure out how much of your investment portfolio should be subject to risk. 

Subtract your age from 100. Whatever number you are left with is the percentage of your portfolio that should be invested in risk.

For example, if you are 80 years old then no more than 20% of your portfolio should be invested in risk, but if you are 40 years old then you could invest up to 60% of your portfolio in risk (Find out How Much To Retire At 40?). 

This is not a hard and fast rule, but the basic principle is that you should take on less risk in your investment portfolio as you get older.

This is a very important thing to consider when you are reaching retirement age, as too much risk could see you lose all your money.

You will not be able to earn it back through working, so you would be left with no money to support you. 

What Is A Crash Proof Retirement Plan?

A crashproof retirement plan takes the rule of 100 and applies it to your retirement fund or lump sum from your pension plan.

A small amount of the retirement fund might be invested in risk with the hopes of getting a good return.

The rest of it will be carefully divided between very low risk investments that are immune to dips in the market, ensuring you a safe and comfortable retirement. 

What kind of investments are crash proof?

There are certain investments that will make a profit when the market goes up, but if the market stays level or goes down they will remain level.

These kinds of investments can be difficult to access as a single investor, which is why people sign up to crash proof retirement plans through a larger company.

The company is able to invest large sums from a variety of customers, which gives them access to a better choice of investments.

For example, investing in the municipal bond market is considered crash proof but would be very difficult to do as an individual investor. 

Why Is Crash Proof Retirement Important? 

There are lots of downsides to a financial crash such as the one in 2008. People lose their jobs, businesses close, and the economy struggles to repair itself.

One of the downsides is innocent people losing large portions of their retirement savings.

This makes retirement very difficult and forces them to rely heavily on their family for support and care. 

If you have worked for years to prepare for retirement, you don’t want to run the risk of losing it all at the last moment.

What Is Crash Proof Retirement

This is why crash proof retirement plans and investments are so important.

They give you the opportunity to protect your retirement fund by investing it in safe, low risk investments.

You can build an investment portfolio that will continue to give you the financial stability that you need in order to live a fulfilling life as a retired person. 

Are There Any Downsides? 

As with any financial commitment, you need to read the fine print. Not all crash proof retirement plans are reliable and trustworthy. 

It is quite normal for the company to not disclose all of the investments that will be made with your money, but you should check what the terms are when you want to withdraw from your fund.

Some plans have heavy penalties for early withdrawal.

Some plans also have caps on how much profit you can make, which will often allow the company to skim a lot off the top and deny you some of the benefits of these investments.

If you are unsure whether to trust a company, seek independent financial advice first.

Financial advisors are regulated by various authorities and they will be able to let you know which companies are trustworthy and which ones are a scam. 

Another issue with crash proof retirements is that you are giving up control of your money to someone else.

It is not like having a financial advisor who assists you in making decisions – the decisions will be out of your hands.

This is a lot of trust to put in one company. 

Another thing to consider is that crash proof investments don’t always make a lot of money.

Just because they are stable doesn’t mean they will be profitable, and if there are issues with taking your money out of the scheme then you could be tying your money up in investments without seeing any real benefit. 

You should always make sure that you fully understand all of the fees associated with the retirement plan.

Some crash proof retirement plans sting their customers on administration fees, management fees, commission, and other costs (Find out What Is A NonQualified Retirement Plan?).

This can take up a lot of your money and leave you struggling to support yourself. 

Summary 

Crash proof retirement plans are a good idea in theory.

If you choose the right company it can be a great way to invest our lump sum retirement fund whilst protecting it against unforeseen economic issues.

However, it is not the right decision for everyone and there are some companies that are not reliable or trustworthy.

Always read the fine print and if you are not sure, seek independent financial advice. 

Andre Flowers
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