A Lightbulb Moment: Planning for A Longer Retirement
If you turned on a light this morning, checked your email, showered, brewed a cup of coffee, and drove to work, you relied on utilities for every single part of that morning routine. We all do. In fact, utilities keep us, and the world around us, functioning every moment of every day. It’s the reason power outages throw us into chaos when they last longer than six minutes, and why the thought of any natural disaster that might threaten our infrastructure is so frightening.
That universal reliance on basic essential services is also the reason why investing in utilities is so attractive to investors. That relatively steady level of demand can mean a steady source of investment income—and that’s the golden goose for those looking ahead to retirement, particularly when the ultimate goal is to live comfortably longer.
When planning for your retirement, one of the most important things to consider is the ability to generate a stable monthly income to live on. You are no longer looking to accumulate assets like you were when you were working; instead you’re trying to preserve what you have. Looking at options that can provide consistent income in up and down markets is critical, and utilities fit the bill because, quite simply, the demand is always there.
However, one of the potential risks of owning certain utilities is concentration in one specific region. For example, a utility serving just one province or territorial population may be subject to changing political environments. Similarly, a power producer in a specific US state that happens to be in an area regularly hit by natural disasters can be negatively impacted by these events. Because it’s so important not to rely on any one particular company for income generation, a diversified portfolio of utilities can help reduce some of the risks commonly associated with utilities.
One of Harvest’s guiding principles is building wealth for their clients through the ownership of historically strong businesses that have the potential to grow and generate a steady income over the long term. The HUTL companies are chosen with this principal in mind. Because of the likelihood that they will perform well and potentially benefit from their geographical diversity, they have the ability to pay consistent dividends over time, which is exactly what you’re looking for when planning for your retirement income.
The global population continues to grow, and standards of living are increasing right along with it. They say that death and taxes are the only certainties in life, but the fact that everyone depends on utilities is another certainty—and one that you can capitalize on to help you secure a predictable, safe retirement income for the long term.
Talk to your financial advisor for more information and visit Harvest at https://harvestportfolios.com/retirement-solutions/
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