What is a Monthly Investment Plan

A monthly investment plan is advertised as a stable monthly income, making it a perfect investment for retired people or people who have a limited income. Many people view a monthly investment plan as a way of saving towards their retirement. Usually when a person reaches retirement age, they begin making withdrawals on their pension or retirement savings. This means their nest egg depletes each time, usually with little money being paid back in. A monthly investment plan means you can make withdrawals, knowing a specific amount will be paid in the next month.

This kind of investment plan should not be confused with an Accrued Monthly Benefit Plan. This is a pension, earned by an employee, and paid out by the employer each month. It has the same benefits as the usual employment plan, and is a set amount each month. With a monthly investment plan, you could withdraw £10 one month and £1000 the next. As long as you had enough to cover your withdrawal, you can take out whatever you want.

A monthly investment plan is a reliable way to achieve a modest monthly income in your retirement. However, these plans are not without their risks. There are many factors influencing your payments, and whether you are paid at all will rely heavily on whatever you have invested your money in. It is always advisable to have more than one income-stream in place for your retirement. This ensures you are not worrying about money in your later years. Savings accounts, cash ISAs and mutual funds are all relatively risk-free ways to build a nest egg alongside your monthly investment plan.


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