How to invest in retirement

Investing offers you the chance to make potentially higher returns. But with every investment, there's an element of risk to take into consideration. 

Now you've decided investing is right for you, it's time to work out how much money you can afford to invest. This could be the excess cash you have at the end of every month after your regular outgoings.

Make sure you are protected against unforeseen events, like your car breaking down or damage to your home. Your emergency fund should equal about 3-6 months' living expenses, but the exact amount you should save depends on your current protection, expenses and savings. You can discuss your specific needs with an HSBC relationship manager.

If you're already retired, you'll probably want to avoid high-risk investments – or at least achieve the right balance with steady, lower-risk ones. Investing in different products can be less risky than putting all of your money in a single type of investment.

Your investment strategy should be balanced to reflect your personal circumstances and objectives, e.g. your capacity to absorb investment risk, your desire for investment growth potential, your ability to protect your purchasing power against inflation, your need for steady returns and any short-term cash requirements.

It is important to regularly monitor the performance of your investments and review your personal circumstances so that you can make adjustments if appropriate. Your Relationship Manager can help you choose a strategy that best suits your retirement plan.

You may consider different investments products in a complete investment portfolio to achieve your goals in wealth management, such as:

• Structured products
• Funds
• Bonds
• Insurance

Structured investment products are relatively common, with various types of financial assets linked to the performance of different markets in the world to help you gain the potential returns on your investment, with the premise of principal protection or partial principal protection. 

Investment funds can be made up of a mix of different types of investments, e.g. cash, shares, bonds and property. Funds values can go up or down. Different funds can offer more potential for growth but there is also a risk you could end up with less than your original investment.

If you're already experienced in investment, funds are a good complement to your portfolio and you don't have to dedicate much of your time to managing them. However, it is important to regularly monitor the performance of your investments and make changes if appropriate.

Bonds are a comparatively low-risk investment with a fixed interest rate, so you know how much you'll earn based on how much you pay in. They often have a fixed maturity date as well, which means you know exactly when you'll get a lump sum. However, they may offer lower returns over the long term and with limited exceptions, bonds do not offer any protection against inflation.

From an economic perspective, insurance is a kind of financial allocation arrangement against accidental loss; from a legal perspective, insurance is a contract, a party agrees to compensate the other party's loss based on a contracted arrangement; from the perspective of the society, insurance is an important part of the security system of social economy, social production and social life, thus an "ingenious stabilizer"; from the perspective of risk management, insurance is a risk management method.

Different insurance products have different functions. For example, in exchange for paying premiums, you'll get a guaranteed income and receive annuity payments annually, quarterly or monthly.

*Your choices of investment products should be balanced to reflect your attitude to investment risk, your financial circumstances and objectives, and etc.