With the right approach, retirees can do more than simply 'get by' after they finish working — they can actively grow their income. Let's take a look at how this can be done.
First of all, we need to examine tax-sheltered accounts. While accounts such as Tax-Free Savings Accounts (TFSAs) may not be retirement income sources in their own right, they are helping retirees safeguard the income they achieve leading up to and post-retirement. By protecting their returns, retirees are able to optimize the income they receive from other investments.
Exchange-Traded Funds provide a relatively inexpensive access point to the world of investment and can provide returns that help with funding retirement. In Canada, energy and natural resources provide healthy growth for ETF investors, although these markets can be volatile, so there is an associated risk.
With assistance from family wealth advisors, you can build an investment profile that actively grows your income post-retirement. Working with expert portfolio managers removes the uncertainty and anxiety when deciding on investments, while the right approach shores up your strategy by hedging against any potential losses as the market develops.
Bonds are relatively low-risk investments that will provide a reliable income via interest payments until the bond reaches maturity — i.e., the date at which the full value of the bond is paid off. Because of this low risk, the returns received from this retirement income source are also relatively low level.
Many individuals are using annuities as a means of funding retirement. When you take out an annuity, you are establishing a contract of payment between an insurance company and yourself, guaranteeing a specific rate of return on your investment. This removes much of the uncertainty regarding income during retirement.
Reach out to the team here at Bellwether and let's get to work on making this happen for you.