Planning retirement income

Question:  In our younger days, many financial planners gave us advice on how to plan our retirement. My wife and I are now a little over 50 and plan to retire in next 2-3 years. We are now holding some stocks, some mutual funds, and some cash.

When we retire, we mean to enjoy our life. We do not want to spend so much time listening to advisors on how to manage our investments in our golden years.

So, Gordon, I would like to know if there is any institution that can provide an investment scheme that by putting in a fixed amount one can get a monthly return (something like a fixed-rate deposit, but a lot better rate of return.) – P.T.

Gordon answers: I understand that you don’t want spend a lot of time managing your money but I hope you are not being short-sighted about this. No investment is perfect and conditions change. The right choice today may be the wrong choice five years from now. Plus there is the little matter of taxation. You want to be sure that your money is invested in such a way as to minimize your tax payable, thereby giving you more cash with which to enjoy those golden years.

There are all kinds of ways in which moneyan be invested to generate monthly income. The amount of income you receive will be directly proportionate to the risk you are prepared to take. You could put everything into a monthly-pay GIC for absolute security. You could invest in one or more monthly-pay mutual funds – there are all kinds of them out there. You could build a portfolio of income trusts. You could invest in equity funds and use a systematic withdrawal plan.

There is no “one-size-fits-all” choice when it comes to investing, especially when retirement income is involved. So the best suggestion I can make is to get over this idea that you can retire to a lake for the rest of your life and forget about your money. You may live to regret it. Instead, find a financial advisor you can trust, set up an income portfolio, and meet with the person once or twice a year to review it. Surely you can afford to take that much time to ensure the money will always be there for you.

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