Maintaining retirement income becomes more of a challenge every year. The good news is that we are living longer lives than ever before. A little research will lead you to stories of upcoming medical breakthroughs possible in the next two decades that may send average life expectancy north of 100 years. We’re also leading more active retirement lifestyles, taking trips, and pursuing hobbies that we always wanted to do during our working years. The downside is this: Can you afford to live comfortably for 25, 35, or maybe even 40 years in retirement? That amount of money could be a big number — and in our opinion our friends down in Washington are not helping. If you are already retired and are trying to generate income as the current yield on a five-year CD you understand the problem. So we’ve included a few articles that may be of help below. We also want to chat about risk.
“One of our missions is to educate our clients about the investment options available to them.”
Several approaches are available to help boost your retirement income today. One could be part-time or even full-time work, but not everyone can physically go back to work. Not everyone would want to. If you’re looking to boost your income from your investments how could you do it? The options include:
- Various types of bonds and bond funds
- Real Estate Investment Trusts (REITs)*
- Options trading**
- Dividend paying stocks or stock funds
- Limited partnerships
Without going into detail for each of the listed strategies, the point of the list is simple, but very important. Each of these strategies has certain associated risks. As an investor you must be clear about how your money is invested and what the possible risks are. Without doubt many people investing their money today don’t understand or haven’t fully been shown how these investments work.
That’s where we come in. One of our missions is to educate our clients about the investment options available to them — and the pros and cons associated with each choice. Investors need this information before they invest so they understand what they’re doing. The bottom line is that every investment, including a CD, entails risk. When you realize that and are comfortable with the investment then it may make sense to put your money to work in some of these strategies.
*REITs: Investing in real estate entails certain risks, including changes in: the economy, supply and demand, laws, tenant turnover, interest rates (including periods of high interest rates), availability of mortgage funds, operating expenses and cost of insurance. Some real estate investments offer limited liquidity options.
**Options: Trading option security contracts involves risk and may result in potentially unlimited losses that are greater than the amount you deposited with your broker. Because of the leverage involved and the nature of option contract transactions, you may feel the effects of your losses immediately. All option contracts involve risk, and there is no trading strategy that can eliminate it. You should thoroughly read and understand the customer account agreement with your brokerage firm before entering into any transactions in trading security option contracts.