With high inflation and increasing interest rates over the last year, relying on a portfolio consisting mainly of fixed income has made it difficult to maintain one’s spending power. If you are retired, you are painfully aware of the difficulty of preserving the value of fixed-income investments while maintaining the same income level. This year, in general, has been a better year for bonds, but with a continued increase in interest rates in the foreseeable future, there is reason for concern.
Fortunately, there are options to supplement your retirement income without worrying about the value of your investments decreasing.
- Reverse mortgage line of credit – provides the ability to access a portion of the equity in your home without having to make payments during your lifetime.
- Life insurance cash value – if you have life insurance policies with cash value, you can access cash without paying it back through the loan provision. Most policies provide a minimum return that continues to accrue regardless of what happens in the bond markets.
- Money market funds – with today’s relatively high yields and no change in the daily value, this option provides a great way to increase your income.
- Laddered bond strategy – takes advantage of relatively high yields and returns the principal upon maturity, eliminating the worry of losing value if interest rates continue to increase.
- Home equity line of credit – provides access to cash when needed. The major drawback of this option is that it requires monthly payments to repay the loan.
These ways provide additional income without taking on market volatility and help you stay on the winning side during retirement. Before following through on any of the above options, you should discuss your financial situation with a financial planner who can review your situation and assess if any of these options make sense for your situation.
Mario Hernandez has been a Certified Financial Planner (CFP) for over 30 years and brings a vast amount of experience in the financial planning and investment management business. Through Longevity Wealth Management, Mario provides holistic planning services that help clients find solutions to live their best life. Mario’s email address is mario@longevitywealthmanagement.com. Securities offered through Osaic Wealth, Inc. member FINRA/SIPC. Investment advisory services offered through Longevity Wealth Management. Osaic Wealth, Inc. is separately owned and other entities and/or marketing names, products or services referenced here are independent of Oasic. Certain insurance products are offered by Mario Hernandez as a licensed agent independent of Osaic Wealth, Inc.. Mario Hernandez is not affiliated with Osaic Wealth, Inc. or registered as a broker-dealer or investment advisor.
