Tue Oct 22 2024, by Tyler Gardner

Three Essential Strategies for Achieving Stable Income in Retirement

Here are three ways that you can create truly stable income in retirement.

I'm Tyler. I'm a former financial advisor and portfolio manager. Now I make financial content for free so that you don't have to pay for it.

1. Short-Term Treasuries

This is by definition a risk-free asset class, and it's highly liquid in case of an emergency. However, it also will have the lowest returns of your fixed income options, hence risk-free.

2. Longer-Term Bonds or CDs

You might get a slightly higher return than on the short-term treasuries, but that return comes at a cost to you. You lose a little liquidity, and now you're also taking on a little interest rate risk. As interest rates go up, you lose a little value in your portfolio.

3. Whole Life Insurance with Cash Value

I'm not being paid to endorse these products, nor do I work for an insurance company. But if the name of the game is truly stability, you might consider whole life insurance with cash value. This can act as a buffer asset as it's protected on the downside and can supplement your annual income in the event of a market downturn.

It also reduces sequence of returns risk as you wouldn't have to sell the investment part of your portfolio if the market took a dive in the first couple of years of your retirement. The cash value would tend to grow at a rate that would actually beat short-term treasuries while having the same risk-free component.

If any of this is helpful, like and follow, and I'll keep trying to get you one step closer to where you need to be.

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