Augment Your Nest Egg With Fixed Income Investments

Retirees and near-retirees alike need fixed-income investments to augment their nest eggs and help lower the overall risk their portfolios have, despite the desire of many to up the risks and increase potential gains. Many seniors don't know what to do with their money in today's age of extremely low interest rates that turn ordinary savings accounts useless, and earnings from the interest almost negligible. As a whole, a surprising percentage of seniors aren't that confident that what they've put aside and what they get from their investments will last them through their golden years, especially as the cost of living continues to rise.

Some "safe" investments can help you make your retirement funds last your life time, such as securities that generate fixed income. These securities were built so that the investor receives specific and regular amounts every year. The resale value of these tools may change as the market does, but the interest that the investor gets as payment is preset, allowing him or her a "locked-in" rate of payment. Bonds are just one type of fixed-income investment that many portfolios have today.

Bonds, the most popular fixed-income security, may come in the form of government/municipal bonds or corporate bonds, the first of which is issued by the federal or municipal government and the second by a corporation. Corporate bond earnings are considered as income when it comes to how these are taxed, while municipal bond earnings aren't subject to federal tax. These types of bonds don't permit tax deductability, although they do have higher interest payments due to the risk involved.

If you buy a municipal bond from a municipality in the state where you live, you'll get earnings that won't be taxed on the federal or state level. Municipal bonds also give decent interest payments and provide tax deductability for the investor. Government bonds with long holding periods have the federal government's backing while corporate and municipal bonds don't.

About the Author:
Carina Smith is an author who specializes in financial topics concerning seniors. Puritan Financial Group gives seniors access to fixed-income investments to help increase their nest egg considerably. For more information on how Puritan Financial Group can help you, please visit our website at http://www.puritanlife.com.

Article Originally Published On: http://www.articlesnatch.com

Tags: tax strategies

, Puritan Financial Group

, 401K

, IRA

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