Retirement Income: How Can I Grow?
August 24, 2023
Having a reliable and steady stream of income can be a game changer in one’s retirement, but it is not the only way to provide yourself with an income. Many retirees prefer to invest their money during retirement to continue to grow their assets. There are all kinds of different ways to grow your retirement income. Below are few of the typical growth areas we see for our clients:
Rental Property
If you have reliable renters and the money in addition to the time to manage rental properties, this can be a good way to make retirement income outside of your 401k or investment accounts. You just have to make sure that you have a plan if you have a difficult time finding a good renter and what you will do for repairs or maintenance.
Dividends
Dividend stocks are stocks that encourage investors to keep their stocks with a business. As a benefit of owning the stock, the businesses often pay a yield based on the profits of a business each year to the dividend stock owners. These vary by the year and the business, so many investors will choose dividend stock funds (like ETFs) that hold multiple businesses divided stocks within the fund.
Fixed Index Annuities
While not built for high growth, Fixed Index Annuities (FIAs) can provide a portion of growth that also guarantees no loss beyond your principal. FIAs are an insurance product, which is different than investing directly in the market. Typically, you’ll receive 3-6% of the market’s growth on up years (depending on your insurance policy), but you won’t see growth on down years. However, unlike investing in the market, FIAs also guarantee downside protection, meaning you won’t lose money when the market is down. These products also come with time limitations for liquidity. It might require 3-10 years of time before you have full access to those funds (depending on the contract). After this time period ends, they pay out a fixed income for retirement.
Mutual Funds
To help manage volatility and aim for growth, mutual funds are a common investment for many pre-retirees and retirees. The best way to think about mutual funds is like the old saying “You don’t want too many eggs in one basket.” If an investor purchases a lot of individual stock in a single company and that company drops in value or has a down year, the investor can experience a lot of volatility and loss. However, mutual funds allow investors to invest in a fund that puts pooled investor funds into multiple different stocks and securities, which can help reduce volatility. Mutual funds do come with fees, taxes on any capital gains, and market risk.
We’re here to give you extra support and professional guidance in choosing the best strategies to make your retirement income work for you. Contact us today to schedule your complimentary consultation, where we can dive deep into your portfolio and strategize your best options!
We look forward to helping you!