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4 of the Best Options for Funding Your Retirement

You have been working for years, but there is good news as the light at the end of the tunnel – retirement – is fast approaching.  However, there is one issue which can lead to anxiety.  How to pay for retirement?  Sure, you could try to win the lottery; however, that is not a realistic plan.  Instead, you want to make sure you have the money you need to enjoy your golden years.  With this in mind, here are four of the best options for funding your retirement.

  • Annuities

Ok, this is an old-school investment option, but annuities remain one of the best investment vehicles for people living on a fixed income.  The reason for this is the way annuities work as they provide a steady income stream, which if managed correctly, can even be passed onto your family.  Another reason for choosing annuities is that they are predictable.

However, the security and predictability does come with some trade-offs.  Among them is the fact that the principal will be locked in the annuity until your death.  In addition, the terms and conditions of annuity products can be complicated.  As such, you will want to carefully review each product and see which one is the best fit for you.

That being said, if you are looking for a fixed-income tool which will provide a steady income over your retirement, then annuities can be a key part of your portfolio

  • Self-Control

You are the master of your destiny and who knows how to better your own money than you?  This makes sense – well, to a certain point.  However, the challenge with self-managing your retirement accounts is that it requires a tremendous amount of self-control, especially when it comes to how you decide to make withdrawals.

Let’s face it, we are living longer, more active lives.  As such, you will need to start thinking about how you can finance 20 to even 30-years of retirement.  Given this fact you might want to work set up a plan which allows you a quarterly withdrawal schedule while reviewing your entire portfolio every five years or so.

This approach will give you the funds you need while keeping you in control of your portfolio and adjusting as your needs change.  However, you will need to be strategic in your thinking, remembering the long-term goal, while giving you the income you need today.

  • Reverse Mortgages

You’ve probably seen the commercials and there is no doubting that reverse mortgages are a popular retirement planning option today.

There are several reasons for this.  First, your home is probably the most valuable asset you own.  Second, most baby boomers have had to live through one of the most volatile periods in our economic history.  When times were good, they were very good.  But bubbles burst and lifetime employment is something which has gone the way of the dodo.

As such, you might be wondering if reverse mortgages are the right option for you.  There is only one way to know for sure and that is to go straight to the source – Ask The Experts found here.  This way you can find out about the costs, how the loans are structured, and ultimately, if a reverse mortgage is the right option for you.

  • Laddered Bonds

Maybe you have not heard of laddered bonds before, but this form of debt finance has been around for years and is a safe and secure way to grow your nest egg for retirement.  Laddered bonds combine steady returns and low risk.  Another plus is that the maturities are split up – this way you don’t have to worry about extensive call risk.

You should know that these bonds usually make interest payments on a semi-annual basis.  So, if you do choose this funding option, then you will need to plan on how to hold the payments to ensure you can earn incremental income on the payment and that you don’t run out of money while waiting for the next payment to come.

A few other things to know about laddered bonds is that you will need to take a close look at the underlying bonds.  This will require some homework, but the extra effort can pay off if you are looking for a safe and continuous income stream.

 

 

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