In a recent article from Kitces.com, the main topic of discussion are the different ways that investors and advisors have been ensuring a retirement paycheck throughout the years. In the past, people have evolved from using a bond-based portfolio, to high-dividend paying stocks, to now just using capital gains. Some investors may even opt to simply put all of their money into an annuity to avoid the possible missteps that can occur in the market that may not be in tune with their current needs.
Creating a retirement portfolio that can actually give you the reliable “paychecks” that you need in retirement is one of the main concerns that most people face when they are saving for retirement and beyond. It’s not just about how your savings can grow, but how can you actually utilize them in retirement. In order to really take advantage of your savings, many people and advisors are taking advantage of the very low transaction costs that are on stocks and mutual funds to simply “cash out” your investments once you need them. Since it’s so inexpensive to sell your funds to get your cash back, more than ever it’s as easy as just selling your position to make a “withdrawal” from your retirement account.
As noted in the original Kitces.com article, some of the biggest issues facing those saving for retirement is really just how to utilize their savings, and that shouldn’t be overlooked. There are definitely plenty of ways to generate a retirement “paycheck,” and some attention should be paid to this problem along with how to properly invest for long term growth.