Safe the Retirement Investments Option
You always want to keep a portion of your retirement investments in safe alternatives. The primary goal of any safe investment is to protect what you have rather than generate a high level of current income.
I recommend all retirees have some a reserve account This account should not be included as an asset available to produce retirement income. It is there as a safety net; something to turn to for unforeseen expenses that may come up in retirement.
Also, if you are not sure what to do with your money, park it in a safe investment while you take the time to make an educated decision. Too many people rush to put their money into an investment because they feel like it should not be sitting in the bank for too long. They end up making a rush decision, which is never a good idea.
Making thoughtful, well-informed investment decisions takes time. While you are educating yourself or interviewing advisors it is perfectly okay to park your money somewhere safe. No reputable professional is going to pressure you into making a quick investment decision. If you’re feeling pressured you may not be dealing with someone who has your best interests in mind.
Income producing closed – end funds
The majority of closed-end funds are designed to produce monthly or quarterly income. This income can come from interest, dividends, covered calls, or in some cases from a return of principal. Each fund has a different objective; some own stocks, others own bonds, some write covered calls to generate income, others use something called a dividend capture strategy. Be sure to do your research before buying.
Some closed-end funds use leverage—meaning they borrow against the securities in the fund to buy more income producing securities—and are thus able to pay a higher yield. Leverage means additional risk. Expect the principal value of all closed end funds to be quite volatile.
Experienced investors may find closed end funds to be an appropriate investment for a portion of their retirement money.