Retirement planning can be tricky: you want to have enough cash to live comfortably and ensure that all your needs are met without relying on your children or relative’s income. With that in mind, setting aside money in a savings account may not be enough. To reliably build your retirement fund, you need to start investing as soon as possible.

After deciding on your retirement goals, crunch the numbers and find out how much you’ll actually need to achieve and sustain your goals. From there, plan out your investments accordingly. Here are the six investment types parents must have before retirement:

1. Stock portfolio

Stocks are issued by companies to raise capital to grow the business or start new projects. Stocks are a good investment, covering a wide array of industries and catering to various levels of risk. It’s a matter of learning what trading strategy and system work best for you or consulting with a financial advisor for guidance.

Should you choose to invest in stock trading, it’s crucial to build a diverse portfolio with several options. This allows you to have a financial cushion that covers any potential losses from your other stock options. A diverse portfolio also increases the chances of larger profits on a long-term scale, so long as you have the capital to invest.

2. Bonds

While stock trading is more dynamic, bonds are a more stable and low-risk investment. Bonds represent loans to the government or a private institution, which are to be paid out upon maturity. Before the maturity date, you are guaranteed to receive an indicated amount of interest that the bond earns, usually paid on an annual or biannual basis.

Depending on the type of bond you invest in, maturity can span anywhere from one year to over decades. This allows you to create what is known as a “bond ladder” or multiple individual bonds (unlinked bond packages found in mutual funds and the like) with maturity dates that are meant to match your future cash flow needs.

This strategy allows you to create a steady passive income to sustain your retirement goals.

3. Real estate property

Investing in real estate property like a house or a condominium can be rewarding, so long as you do your research and carefully prepare for it.

Deciding on a property can depend on several factors: location, the surrounding community, state of the property, proximity to business, transit hubs, and other essential services, and so on. These factors will determine how profitable the property will be.

This property can pay off in two ways—either by flipping the property when the market value is high or converting it into a rental property. The former may take some time and careful monitoring to guarantee you get the best price for it. The latter will provide a continuous source of income.

However, preparing a rental property will require additional costs for maintenance and upgrades to make it attractive to potential tenants.

When acquiring the property, be financially smart with installment buying. A hefty lump sum can wring your retirement fund dry and leave you with little excess to put towards other investments. Installment buying helps spread out the cost more manageably, letting you stay more liquid for other spending or investment opportunities.

4. Health insurance

One of the most important things you will need to plan for your retirement is your health and well-being. As retirees, you won’t have a monthly salary to rely on to cover expenses for things like doctor’s appointments, medication, and treatments. Getting a health insurance plan gives you an option to fall back on when you need it.

Nowadays, plenty of insurance products provide coverage for older beneficiaries and address specific health solutions. Shop around for a plan that best fits your budget and anticipated needs.

5. Unit-linked insurance plans

Preparing your estate and securing your legacy are essentials to any retirement plan. Luckily, you can do both through unit-linked insurance plans.

Unit-linked insurance plans are financial instruments that offer investment opportunities bundled together with an insurance plan. This is done by investing a portion of the principal into a mutual fund, making it possible to earn while enjoying the benefits of a chosen plan, such as life insurance.

Specifically, unit-linked life insurance plans can both provide you with additional earnings to put towards your retirement and set up other benefits for your loved ones in the case of your passing. Some insurance providers may allow you to attach riders to your plans, such as lifetime continuous income, guaranteed withdrawal benefits, and more.

Consult with an agent and do your research on the pros and cons of these riders. The goal is to customize your plan to maximize gains for yourself and your beneficiaries

6. Emergency fund

Preparing for emergencies and other unexpected events is important, doubly so for retirees. Unexpected events could leave you scrambling to finance immediate crucial needs—and with no regular source of income, this could lead to financial difficulties.

An emergency fund is meant to act as a cushion and address these sudden expenses without compromising your financial status. The amount your emergency fund should have will depend on the retirement lifestyle you plan to lead and how much of a cushion you think you’ll need.

This amount should be stored in a savings account separate from the rest of your retirement fund to avoid unintentionally spending it on non-emergency situations. Consider opening your emergency savings account at a bank with high interest rates, enabling your emergency fund to grow a little while it remains unused.

Live the best golden years

After years of hard work and effort, retirement is the opportunity to enjoy the fruits of your labor, spend time with your loved ones, and even pursue goals that seemed impossible during your working years.

Making this ideal retirement life a reality requires careful preparation and a little sacrifice. By cutting back on spending and moving your money towards the right investments, you put yourself one step closer to your legacy.