1. Money

9 Ways To Generate Retirement Income

Retirement Income Strategies To Mix And Match

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The right retirement income strategy depends on your age, desired income, and tolerance for market risk.

Here is a list of numerous retirement income strategies to mix and match. Take the time to learn about all of them before building a retirement income plan of your own.

1. Certificates of Deposit and Other Safe Investments

Pros: Principal is safe.
Cons: This strategy will generate the least amount of income. Income varies with interest rates as CD’s mature and are renewed. Income may not keep pace with inflation. Depending on interest rates, it may require a large amount of capital to generate the amount of retirement income you need.

2. Laddered Bonds

Pros: More income than a CD/safe investment strategy.
Cons: Income may not keep pace with inflation. Depending on interest rates, it may require a large amount of capital to generate the amount of retirement income you need.

3. Stock Dividend Income

Pros: Historically, capital will grow, and companies gradually increase dividends, providing a means for your income to rise with inflation.
Cons: Principal fluctuates in value with market. Companies may reduce or eliminate dividends during tough times.

4. High Yield Investments

Pros: High amount of initial income generated.
Cons: Principal will fluctuate in value. High yield investments may reduce or eliminate their distributions during tough times.

5. Systematic Withdrawals From A Balanced Portfolio

Pros: If done right, likely to generate a reasonable amount of inflation adjusted lifetime income.
Cons: Principal will fluctuate in value and you must be able to stick with your strategy during those times. There will be years will you will need to reduce your withdrawals.

6. Immediate Annuities

Pros: Guaranteed lifetime income.
Cons: Income will not keep pace with inflation unless you buy an inflation adjusted immediate annuity (which will have a much lower initial payout). No access to principal, nor will principal pass along to heirs.

7. The Income For Life Model

Pros: Easy to understand and has the potential to deliver great results.
Cons: In its purest form, this strategy entails taking on investment risk, but it could be modified to use guaranteed income products.

8. Variable Annuity With Guaranteed Income Feature

Pros: Guaranteed lifetime income that may keep pace with inflation if market rises. Principal remains available to pass along to heirs.
Cons: May have slightly higher fees than other options.

9. A Retirement Asset Allocation To Generate Maximum Lifetime Income

Pros: A combination of several retirement income ideas listed above.
Cons: Takes a lot of work to put it together right, but worth the effort.

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