Generating income in retirement with next to 0% interest rates …
It’s no secret that interest rates have been next to 0% for over a decade now.
Unfortunately, that’s not expected to change anytime soon.
If you’re buying a home, or if you’re a giant corporation in need of cash, low-interest rates are a boon because borrowing money is dirt cheap.
But if you’re retired, or planning on retiring anytime soon, this cripples your ability to generate income from traditional sources like CD’s and savings accounts.
If you invested $250,000 in a one-year CD, it would yield approximately $200 a month. And that’s before taxes.
These record-low interest rates are forcing many people to take more risks in the stock market in search of higher yields.
They’re taking more risk than they know, or than they need to at this stage of the game. And that could be a recipe for a financial disaster.
The good news is …
There are still some surprisingly attractive options to generate income today while minimizing risk. And many of these options you may not even know exist.
These options include dividend stocks, real estate, annuities, life insurance and more.
One last thing …
No matter what you do – don’t put all your eggs in one basket.
Instead, create multiple streams of income in retirement from different sources. So, if one source goes south, you have other options. This way your expenses are covered and you’re not forced to go back to work.
If you don’t withdraw money or miscalculate your required minimum distributions, you could pay a 50% tax penalty — the steepest penalty issued by the IRS.
You could also get pushed into a higher tax bracket. According to the Motley Fool, “the extra income is enough to push you into a higher tax bracket, and that can affect how much tax you pay on other sources of income.”
RMD’s become even more dangerous because you could be forced to sell investments during a stock market downturn, or a bear market. This would lock in your losses and deplete your accounts even faster.
The key to successfully navigating RMD’s is to get in front of them in your early to mid 60’s. Because the longer you put it off, the fewer options you’ll have.
Check out the three different ways we could help you navigate required minimum distributions below.
Whenever you’re ready, here are 3 ways we could help you turn your savings into an income workhorse in retirement.….…
Watch an on-demand, online discussion about different pillars of retirement planning. Click HERE.
Please join us for one of our upcoming free, educational events about planning for retirement. Check out our next events HERE.
To learn how you could generate more income in retirement, schedule a free analysis with one of our fiduciary advisors by calling (801) 682-1493.
Advisory services offered through B.O.S.S. Retirement Advisors, an SEC Registered Investment Advisory firm. Insurance products and services offered through B.O.S.S. Retirement Solutions. The information contained in this material is given for informational purposes only, and no statement contained herein shall constitute tax, legal or investment advice. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. You should seek advice on legal and tax questions from an independent attorney or tax advisor. Our firm is not affiliated with the U.S. government or any governmental agency. Please note that we are unable to accept any trade requests via email, voice message or text.
.