So, you want to retire, but you’re worried about your income? Bonds don’t accumulate as much interest as you’d like, and everything else just seems a little bit bleak. It can be daunting looking into other options because you have no idea how they work and if you can trust them, so you’d spend hours searching for the right thing on the computer. Well, look no further. This article explores how you can use mutual funds for retirement or a fixed income mutual funds and not have to worry about your income again. Read on to find out what we mean, and how you can take advantage of this wonderful opportunity!
How Does it Work?
The way to use mutual funds for retirement is simple. You need to invest in equity growth, you need to calculate 4% of your account value, split that up by 12, and then commit to selling that number from your account monthly to have it sent. With your new number, look at the withdrawals, and see if you earned more. If you did, then your income will go up a bit. By doing it this way, you ensure a little bit of a safeguard for your income, and it means that you could put your funds to a cause that will ultimately give you a nice sum for when you’re about to retire. It is a scheme that could mean you are safe no matter what happens in the market – how? Read more to find out just how your funds are protected by this scheme.
The What If Scenario
You’re probably thinking, ‘If I’m coming to you for help, I don’t exactly want to lose the income I need to invest, so what if I lose money?’ That is a valid concern. Our solution to that is to be willing to accept that losing some money and slowly gaining it back is better than losing it all. Once this fact is acknowledged, it will become a lot easier to invest in equity growth. It is a long-term commitment. We know we may have scared you a bit with the C word but there is no other way to phrase it. Once you come to terms with accepting this isn’t a ‘get rich quick’ scheme, then your mind will be more at ease. It is a long-term scheme that will require a lot of patience. In a way, it’s like waiting for a pie in the oven. You don’t take it out and eat it before it’s done, so it is the same principle with this type of thing. You need to wait for it to be the perfect pie even though it cost a little bit of money for the ingredients.
How Will a Mutual Funds Account/Mutual Funds for Retirement Work for You?
Well, the truth is, we don’t know that it will. We can’t see the future any more than you can. One thing about the market is that it isn’t straight up and down. You need to have patience and see what it will be like years in the future. What we’re saying is that you never know until you give it a shot and do your best research before you make a decision. Something we mentioned previously is that the market is not straight up, and it is more done in waves than in lines. That could have got you a bit worried about the sustainability of this plan. Rightly so, but after a bit of digging, we found that if you were to go through with this plan, you would never run out of fixed income mutual funds in the long term. Why? Because as soon as the market has one of its dips, you can adjust your income accordingly to match what’s happening.
People are a little reluctant to use this approach but it could be the one for you when it comes to using mutual funds for retirement because it means you won’t run out of money, even in dramatic drops in the market. It will be a little difficult focusing on the big picture and losing a bit of money to start with, but you could truly make it work, and it is certainly something you should consider when looking at retirement income investments.
Featured Image Source: Thinkstock/varaphotoPosted on October 18, 2016