HomeInvestmentsReuters Provides Some Options to Create Your Own Pension

Reuters Provides Some Options to Create Your Own Pension

I am always interested in creating future streams of income akin to a personal pension.  I am obsessed with the idea since it is likely I’ll never be involved in a defined benefit or pension plan provided by my employer and I think it has to be terrifying to one day stop your income but still have the same living expenses (i.e. traditional retirement for people) .  In the past I have discussed, the liability based pension design, the option to use life insurance to create a pension and even other insurance based products to create that future stream of stable income.  So when I saw a Reuters’ Video titled, The Do It Yourself Pension Plan, I immediately was intrigued.

Creating The Do it Yourself Pension from Reuters

Asking four different advisors about a fictitious 60 year old couple with $500,000 to investment Reuters came up with 4 non-mutually exclusive ideas.  The names are terrible and do not provide much of a description of the actual technique being used, but each idea is pretty good and deserves a lot more attention.

  1. Bond Ladders – Not sure why the report gave it that label since there are other parts to it.  Notwithstanding this strategy is made up of 36% Muni-Bonds, 34% of other investment grade bonds, 23% Stocks, 2% REITS and 5% Cash.  As indicated in the video, they are talking about actual bonds and not bond funds so interest rates are less likely to affect the value.
  2. Dividend Paying Stocks – Again, a terrible name for what she is offering as an idea (although I like the idea).  60% of stocks (half of which are dividend oriented), 20% high yield or mortgage backed bonds and 20% REITS/MLPs. Anyone that has ever read this site knows I love me some dividend payers, but why call this strategy “dividend paying” if only 30% is focused on the namesake?
  3. Annuities – 50% in an Immediate Annuity, 20% Fixed Income, 20% US/Int’l Stocks 10% REITS/commodities.  At least this name sort of works.
  4. D.I.D. (Dividends, Interest, Distributions) – Again, couldn’t all the ideas be encompassed in this name?  The portfolio is made up of 30% in Equities 45% Fixed Income 25% MLPS/REITS.

I know I am not supposed to because I am only 31 but I love investing for income! There is something about tangible (and often reliable) returns from your investments.  I am in still in the middle of building my dividend portfolio, but will absolutely start to look into the other options on this list in the years to come.



Please enter your comment!
Please enter your name here

Related Articles

Recent Comments