One of the costliest errors people make in their retirement planning is focusing all of their efforts on getting to retirement but forgetting about how to get through it. The idea of protection and sustainable income in retirement never seems to make it into their thinking.
That’s because retirement plans, for those who even have a plan, and there are very few who do, are never updated. Most plans still sit on the shelf where they were placed immediately after being received.
The result is an organized effort to put together enough money to retire and, at best, a poke and hope strategy once there.
It comes down to retirement asset planning versus retirement income planning. Having the assets to retire is only half the game. Turning them into the safe, sustainable income you will need to survive is a whole other ballgame.
Remember, retirement is essentially 20 to 30 years of unemployment.
The recent shift by many investors to income-producing stocks – dividend payers that have in the past increased their dividends and will continue to increase their payouts – is a big step forward, but it’s only a partial fix.
Where most people fall short is in the protection area. Most retirees go overboard and have too much of a guarantee from the old-time favorites: CDs, saving and Treasurys. Or they ignore the safety issue altogether and stay with the more aggressive portfolios that got them to retirement.
The solution lies somewhere between guarantees and high risk. And it is in the least understood of all investments: bonds.
The right bonds, either municipal or corporate, can give you the stable, reliable and predictable returns you have to have to make it through retirement. And with the right maturity strategy in place, bonds can weather all market conditions. But virtually no one owns any.
Institutions dominate this part of the investment world. Bonds are the forgotten child of the money world, especially by the small investor.
But if you want to get through and not just to retirement, you need to get familiar with what the right bonds for your situation can do for you…
- Capital gains
- Predictable returns
- Stable market values
- And sustainable income.
Get to know bonds!
It’s how to not wake up broke in your 80s.
A Note From the Editorial Director: In addition to hosting the Two Minute Retirement Solution, Steve is also The Oxford Club’s bond expert. In 2013, he had a 93% win rate on all the bonds he recommended. We’re talking gains of 12%, 14%, 17% and higher… on bonds! Follow this link to find out which bond plays Steve believes are the top three to buy right now.