Interest Rate Window of Opportunity for Retirees
What if the market environment that crushed retirees for a decade and a half has now become your biggest financial advantage? Today, we’re gonna break down exactly what changed and how to add thousands of dollars a year to your annual retirement income. I’m Anthony Saccaro. Thank you for joining us today for the Providence Financial Retirement Show.
We are your retirement income source, and this is the place where retirees come for income. We’re gonna spend our time together today talking about interest rates, because you have a window of opportunity that most of you don’t even know exists, and yet this window may be short-lived, and I want you to understand how to take advantage of it.
If you’re curious as to what that window is, you’re gonna wanna stay with us. As always, we’re also gonna answer your listener questions along the way as well. It’s also a good time to remind you that if you have a question for us here on the Providence Financial Retirement Show, just jump on over to providencefinancialradio.com and you can ask your question there.
We’d love the opportunity to read it and see if we can answer it on a future episode What exactly is this window of opportunity then that I’m referring to? Well, it has to do with interest rates. Right now, interest rates are almost as high as they’ve been any time in the last fifteen years. And if you’re retired, you have an opportunity now that might disappear shortly as interest rates start to go down if the predictions actually happen the way that everyone thinks they’re going to.
How Zero Interest Rates Crushed Retirees for 15 Years

From two thousand and eight all the way through just a couple of years ago, we were living through a zero interest rate environment, and retirees who were trying to live on fixed income got crushed because they couldn’t get any type of interest or dividends from their portfolio that actually made any sense.
The ten-year treasury was ranging between half a percent to two percent for well over this time period, and money market funds and savings accounts didn’t pay anything at all. And if you were retired and trying to play it safe, you lost. A few years ago, though, interest rates started to climb, and the ten-year treasury now is paying around four and a half percent, and you can get about that same rate in high yield savings accounts or money market accounts as well.
So interest rates have gone up and these safe investments are paying more. For the first time in the last couple of decades, you can actually earn decent rates of return on safe investments. If you potentially have another twenty or thirty years left in life and you need income from your portfolio, our current interest rate environment today couldn’t be any better.
This is a window of opportunity that you have right now that might disappear shortly. During the decades where interest rates were nearly zero, if you wanted to earn more, you were forced to take more risk. Today, however, you can get four percent a year virtually with no risk at all. And if you’re willing to take a little bit of risk, you can even earn a lot more than that.

This is the biggest shift in retirement income strategies in a generation. It’s not going to last forever, though. If the Federal Reserve starts cutting interest rates, which is what’s predicted over the next couple of years, then your opportunity is going to close. This simply means that locking in higher interest right now becomes critical, especially if you’re gonna be relying on that interest over the course of your retirement.
The difference between acting today and waiting even a year might be decades of lower income. You have the opportunity right now to lock in higher interest rates for a longer period of time than you have had in many decades. Throughout the course of our show today, we’re gonna talk exactly about how to go about doing this.
The Case for Fixed Income and Locking in Higher Rates

If you’d like to learn more about fixed income And how you can lock in higher interest rates, I’ve got a resource you wanna get ahold of. It’s a short animated video that’s only seven or eight minutes long, but it’s animated and it’s fun to watch, and it’s called The Case for Fixed Income. When you watch the video, you’ll learn how your portfolio can actually generate income in the form of interest and dividends without having to cannibalize your principal.
Simply stated, this means that you’ll never have to worry about running out of money because interest and dividends is a renewable resource. You will get them, you can spend them, and next year they will come back again, and this animated video is gonna show you exactly how that works. I wanna send you this video absolutely free of charge.

We’ll just email it to you as long as you give us your information, and you can do that by going to providencefinancialradio.com/video. Again, it’s providencefinancialradio.com/video. Leave us your name and email address and other information, and you’ll have that video in your inbox shortly, and you’ll be able to watch it, and you’ll learn what you need to know about fixed income and how you can lock in higher rates for longer.
To claim your free video now, just go to providencefinancialradio.com/video and we’ll get it right out. I’m Anthony Saccaro. Thank you for taking time out of your day to join us here for the Providence Financial Retirement Show. Today, we’re talking about The window of opportunity that you have to lock in higher interest rates for a longer period of time.
If you’re a saver and you’re retired and you wanna spend income from your portfolio, this is a great opportunity for you, but it’s not gonna last forever. Where do you get these higher yields though? Well, it depends on whether your investments are gonna be needed in the short term or whether they’re gonna be longer term investments.
Short-Term vs Long-Term Fixed Income Strategies for Retirement

A short-term play could be something like a high-yield savings account, which right now are probably paying somewhere in the range of three and a half or 4%. You can get a little more than that on CDs that mature in one to two years. And money market funds are probably gonna be about as similar as the high-yield savings accounts, albeit slightly less liquid.
If you’re looking to lock in yields for a longer period of time though, then you might wanna consider things like corporate bonds or preferred stocks or BDCs or even fixed or indexed annuities. If you set this strategy up right like we do at Providence Financial, you can probably count on somewhere between 5% and 7% of yield locked in for a longer period of time.
Whether you should invest primarily in short-term instruments or longer-term instruments really depends on what the purpose of that money is. If you’re going to need that money in a couple of years, you certainly don’t want to lock it up in longer-term investments. On the other hand, if this is long-term money that has to last you the rest of your life, you probably don’t wanna lock it up in shorter-term investments.

This is one of the most common mistakes that I see people making today. They notice that short-term investments seem to be paying a good interest rate over the next one or two years, and what a lot of them have done is focus on those short-term investments for their retirement dollars that need to last them the rest of their life.
The problem with this approach is that when those short-term investments mature, if interest rates have gone down, your income is gonna go down as well, which could directly impact the amount of interest and dividends you can get out of your portfolio Generally, you wanna use short-term investments only when you’re gonna need the cash in the short run, meaning just within a few years, and you wanna focus on longer-term investments for your longer-term money, money that has to last you the rest of your retirement.

By doing this, you have the ability to lock in higher yield for a longer period of time. When you lock in higher interest rates today for a longer period of time, even if interest rates go down in the future, you’re still going to get the higher rates that you locked in today. If you have a lot of your long-term money currently locked up in short-term investments, you might wanna actually consider reinvesting into something that’s gonna give you a higher interest in dividends for a longer period of time.

That way, when interest rates go down, you don’t have to worry about it because you’ve locked in your income. If you’d like to learn more about how to do this, in my book, More Life Than Money, I wrote an entire chapter about fixed income and how you can lock in longer rates for a longer period of time. I wanna send you More Life Than Money absolutely free of charge, and all you have to do to get it is go to our website at
providencefinancialradio.com/book. Again, it’s providencefinancialradio.com/book. Leave us your information, and we’ll FedEx a hardcover copy of More Life Than Money right out to you. One more time, to get your free copy of More Life Than Money, just go to providencefinancialradio.com/book and you’ll have it in a few days.
And you’ll learn how you can lock in higher yields for longer so that you know you can count on your higher income and not have to worry about that interest rate risk that we talked about a little while ago.
Thank you for staying with us here on the Providence Financial Retirement Show. My name is Anthony Saccaro. We’re spending our show today talking about the window of opportunity that you have with regards to the interest rate environment. That window has to do with the fact that interest rates are high, but they’re expected to go down shortly.
This gives you the opportunity to lock in higher interest rates for a longer period of time than when interest rates go down. We have a question that fits in nicely with our show, and it comes from Karen in Pasadena, and she asked this: “I’ve been hearing a lot about annuities lately. Someone told me I can earn more interest than the bank is offering, but it’s just as safe.

Is that really true?”
Fixed and Indexed Annuities for Safe Retirement Income
Karen, thank you for taking the time to write in the question, and the answer is yes and no. It really depends on the kind of annuity that you’re talking about. There are annuities out there that have just as much risk as the stock market, and yet there are annuities out there that a lot of advisors are saying just as safe as the bank.
Legally, you can’t really say this because banks are FDIC insured and annuities are not insured by FDIC. They are insured by the states that they’re issued in, but they’re not backed by the government per se. They’re backed by the claims-paying ability of the annuity company, the insurance company that issues them.
The reason many p- advisors position them as just as safe as the bank, though, is because according to my knowledge and the research I’ve done, when it comes to fixed and indexed annuities, no one that I’m aware of has ever lost any money in them. There are insurance companies that have gone bankrupt to be sure, but most of the times, another insurance company will come in and take over those assets, and your annuity will continue as if the insurance bankruptcy never happened.
This does not apply to variable annuities where you take all of the risk, but it does apply to fixed and indexed annuities, and it probably makes sense to have a quick discussion about those. Let’s start by talking about fixed annuities. Like the name sounds, you can lock in an interest rate for a longer period of time with a fixed annuity.
Right now, depending on the company, you probably get somewhere in the range of 4.5 to maybe 5% locked in for five to ten years, and of course, this is a lot more than banks are paying. There’s also another type of annuity called a fixed index annuity, and it’s still fixed, meaning that you can’t lose money to market value, but your interest rate every year is not guaranteed.

The interest rate every year will depend on what the stock market does. You’re not invested in the stock market. You don’t have the risk of the stock market, but the stock market is gonna be used as the gauge to determine how much interest you can earn in any given year. In bad stock market years, your annuity’s not gonna earn any interest at all, but your principal’s not gonna be affected.

In good years, you’ll earn some interest, depending on a variety of factors, with the goal of earning higher interest than you could anywhere else in a vehicle that’s just as safe. There are some annuities out there today that will allow you to earn as much as 20% of interest in one year, and yet they’re still just as safe as the bank.
I hate to even throw that out there, though, because that’s definitely not an average return that you’re gonna get. You might get that in one year, but you’re not gonna average that But these indexed annuities could potentially average somewhere between 5% and 7% per year over the life of the annuity, which usually is about 10 years.
Annuities are certainly not right for everybody, but if you have some money that you wanna keep safe and you’d like to earn or have the potential to earn between 5% and 7% per year, then they could be right for you. Thank you, Karen, for taking time to write in the question, and I certainly hope that you now have some more clarity as far as annuities are concerned.
If you have a question for the Providence Financial Retirement Show, all you need to do to ask it is go to providencefinancialradio.com and you can ask it there. When it comes to non-retirement money, annuities also have a tax advantage that many other investments don’t have as well, so they could be very tax efficient, which could be extremely valuable if you’re in a higher tax bracket.

If that sounds like something you might be interested in learning more about, we’ve put together a commission report that talks about annuities and the different kinds, and what you need to know to make a good decision before ever buying one. I’d like to send you this report absolutely free of charge, and all you need to do to claim it is go to providencefinancialradio.com/report.
Again, it’s providencefinancialradio.com/report. Give us your information and we’ll email it to you shortly, and you’ll learn what you need to know about annuities and how you could potentially earn a higher interest rate for a longer period of time with money that is safe. To claim your free report, go to providencefinancialradio.com/report and you’ll have it shortly in your inbox.
I’m Anthony Saccaro, really glad that you’re with us today for the Providence Financial Retirement Show. We’re talking about interest rates and the current window of opportunity that retirees have to lock in higher interest rates for a longer period of time We’re gonna shift our conversation here and answer another question from Robert in San Diego who asked this: “I keep hearing about buying individual bonds versus bond funds.
What’s the difference, and which one should I actually be buying for retirement income?”
Individual Bonds vs Bond Funds for Retirement Income
Robert, thank you for asking the question, and let me give you some things to think about. In my 27-year career of being a retirement advisor, I’ve found that most people who have bonds don’t actually own the bonds individually.
They actually own bond mutual funds. And like you, Robert, most people don’t understand the difference. But for retirement income, this decision changes everything about your strategy. Individual bonds and bond funds look the same on paper, but they work completely different in practice. When you buy an individual bond, you’re buying a specific bond from a certain entity.
It could be the government, it could be a corporation, or it could be a city or state or any other type of municipality. You know exactly when it matures, you know exactly what interest rate you’re gonna earn, and you get paid that interest twice a year during that time. And at maturity, you’re going to get your principal back, as long as whoever issued the bond is solvent.
When you own an individual bond, you own a contract, because that’s what a bond is. It’s a contract. You also get the guarantees of the contract, and the two guarantees that you should be aware of is guaranteed interest and a guaranteed return of your principal, again, as long as whoever issued the bond is solvent.
Let me give you an example. Let’s say that you buy a corporate bond from a large corporation, very solid, highly rated, and that’s giving you 5% per year with a maturity date of 10 years. That bond’s gonna pay you $5,000 a year every single year for 10 years, and at the end of 10 years, you’re gonna get your $100,000 back, and those are two guarantees that you can count on.
Between the time you buy the bond, though, and the time the bond matures, the value of that bond’s gonna fluctuate, and there’s a lot of reasons why bond values fluctuate, but it’s not gonna stay the same. On paper, it’s gonna go up or down What’s important for you to know, though, is that regardless of the fluctuation, your five thousand dollars a year is going to stay consistent.

That’s not going to change. That’s all because you own an individual bond. Compare that to a bond fund, though. When you buy a bond fund, you don’t own the bond directly. You own a mutual fund that has a lot of bonds in it. Consequently, you lose the two most important guarantees that owning the individual bond’s gonna give you.
You don’t have a guaranteed interest rate, and there’s no maturity date. Simply stated, this means that if the bond fund goes down in value, there’s no maturity to hold it to, and you’re never guaranteed a return of your principal. Once you understand that– No, let’s say that again. Now that you understand this difference, you’re probably starting to realize how it is that owning individual bonds versus bond mutual funds can shape your retirement strategy.
At Providence Financial, we tend to favor individual bonds because we wanna get you income that we know you can count on and not income that we hope you can count on. And thank you again, Robert, for taking the time to write in that question, and I certainly hope that my answer has helped you. If you’re sitting there just starting to realize that you probably have a lot of bond funds in your portfolio, like most of you do, and not individual bonds, and you wanna learn more about the difference between the two, I’ve got a commission report that we’ve put together just for you.
The report gets into more detail about the difference between individual bonds and bond funds, not only discusses what we’ve already talked about, but you’ll get more information as well. I’d like to send you this report free of charge as long as you want it. And if you do want it, just go to providencefinancialradio.com/report.
Again, it’s providencefinancialradio.com/report, and we’ll get it right out. Once you have it, you’ll be very clear on what the difference is between individual bonds and bond mutual funds, and it’s yours free of charge as long as you give us your information. To claim your free report, just go to providencefinancialradio.com/report and you’ll have it in your inbox shortly.

I’m Anthony Saccaro. Thank you for taking time out of your day wherever you might be to listen to us here for The Providence Financial Retirement Show. We’re spending our time talking about the window of opportunity that might be short-lived, but as a retiree, you have the ability to take advantage of, and that’s the opportunity to lock in higher rates for a longer period of time.
We’ve covered a lot of ground so far. Up to now, we’ve been talking about interest only. We’ve talked about short-term investments like money market accounts and CDs and high-yield savings accounts, and we’ve also talked a little bit about annuities and bonds, and those pay interest. One of the confusions and questions that many of you have, though, is what’s the difference between an interest payment and a dividend payment?
We get that question all the time, and I want to spend some time answering that question to help give you some clarity.
Interest vs Dividends: Key Differences for Retirees
In short, interest payments are always gonna come from someone that you lend money to. If you loan money to anybody, you wanna get interest in return. If you have a savings account, technically you’ve loaned the money to the bank, they’re using your money, and they’re gonna pay you interest.

If you have an annuity, once again, you’ve given your money to an insurance company, they’re gonna use it for their own purposes, and they’re gonna pay you interest on that. The same thing with a bond. It’s gonna pay you interest because you’ve loaned the bond issuer money, and they’re gonna give you interest in return, along with the guarantees that we talked about.
The United States government currently has a debt of about thirty-nine trillion dollars, and roughly thirty-two trillion dollars of that is money that they’ve borrowed from the public. These individuals own the bond, and the government pays them interest because, once again, bonds pay interest because these individuals have loaned money to the government.
That’s why the government’s in debt. Bond interest, though, is not the only way to get income. You can also get income through stock dividends. It’s definitely not as safe. All the guarantees that bonds offer go out the window, so they’re not gonna pay as much as far as income is concerned, but there’s also potential for growth.
Many of you might not even know what dividends are. When you own a stock, you own a part of the company. Companies make profits, and they share some of those profits with the owners, and that share is called a dividend. If a stock pays a three percent dividend, it simply means that the company is sending you three percent of your investment profits every year because you’re an owner in the company.

Allow me to highlight a couple of differences, though, between interest and dividends. The primary difference with interest is that you’re a lender. The company owes you that fixed amount, and they’re gonna pay you interest. With a dividend, you’re not a lender, you’re an owner, and the company sends you a piece of its profits.
Interest is going to stay the same. Dividends, on the other hand, can grow or shrink. Interest is also very predictable, which makes them somewhat boring. Dividends are dynamic. They can change quarter to quarter. At Providence Financial, with the portfolios that we’re managing on behalf of our clients, most of them have some dividend-paying stock, some bonds, and some other investments that pay dividends and interest as well that we’re gonna talk about here in just a few minutes.
It’s not all or nothing. It doesn’t have to all be dividend stock or all bonds. It can be a mixture, and most of the times, having a mixture is better than just having one particular asset class. Either way, regardless of how you get the income, the general umbrella term used to define income-producing investments is that term fixed income.
If you wanna learn more about fixed income, we put together a short animated video that’s only seven or eight minutes long that is called The Case For Fixed Income. We’ll send it to you free of charge, and all you have to do is just give us your information, which you can do by going to providencefinancialradio.com/video.

Again, it’s providencefinancialradio.com/video. Fill out the form and leave us your information, and we’ll email you this animated video within just a short time. To claim your free video, go to providencefinancialradio.com/video, and we’ll get it right out, and you’ll learn everything you need to know about fixed income.
Thank you for continuing to be with us here for the Providence Financial Retirement show. I’m Anthony Saccaro,
and we’re talking about the interest rate environment and the window of opportunity that you have to lock in higher interest rates for a longer period of time. Up to now, we’ve talked about the big difference between individual bonds and bond funds. We’ve hit on annuities, and we just talked about the difference between interest and dividends.
I wanna change our focus, though, and talk about other investments that could rightly be classified as fixed income but that are not bonds. Most of the time when that word fixed income is thrown out, most people think of bonds, but there’s a whole universe of options out there that are not bonds that could really be classified as fixed income.
This is where we’re gonna spend the next few minutes We’ve already talked about dividend paying stock, and although stock dividends can change or the company can quit paying the dividend at any point in time, the simple truth is that there are many, many companies out there that have raised dividends every year for many years.
And even though they can change it and legally they can stop the dividend at any point in time, they’ve shown us by their track record that they don’t intend on doing that. And there are probably some of you and some financial advisors that would say that stock is really not classified as fixed income, and I think legally I could agree with that.
But if you have high dividend stocks that you know you can count on the dividend, or at least with a high degree of certainty that you can count on it, I think you could classify them as fixed income because you’re getting income from that portion of your portfolio. And good companies tend to raise dividends over time as well too, which could help offset inflation, and you have potential for growth.

Preferred Stocks, REITs, and BDCs as Fixed Income Alternatives
In addition to dividend paying stock, which so far we’ve been talking about common stock, even though I haven’t used that term, there’s another class of stock out there you need to be familiar with, and that is preferred stock. Preferred stock is not common stock. It would be a mistake to think that they both work the same ’cause they’re truly different classes of stock.
Not all companies that issue common stock even issue preferred stock. But when a company does issue a preferred stock, they issue it with the promise to pay a dividend. And when you put a preferred stock into your portfolio, you have income that you’re pretty certain you can count on. Another investment that some of you have probably heard of but might not be familiar with that’s gonna pay dividends are real estate investment trusts, also known as REITs.
These are companies that own and manage real estate. Think about apartments, think about offices, warehouses, hospitals, nursing homes, and almost any other type of real estate you can imagine. But when you buy a REIT, you’re buying the stock of a company that owns and invests in real estate, and that gives you two possibilities: the possibility for the share price to grow as the value of the real estate grows, and the opportunity to collect dividends from the rent and lease payments that the REIT company is collecting from their tenants A lot of people also think that REITs are safer because they’re actually backed by real estate.

There’s a hard asset that is actually backing the value of the stock, and I think there’s some truth to that. Another investment that could be classified as fixed income is something called a BDC or business development company. Now, I know many of you have not heard of them, but a BDC really is like a bank to businesses.
There are a lot of medium-sized companies out there today that are up and coming, and they’re growing, and they need a lot of cash, but they’re kinda stuck. They’re not the Fortune 500, so they’re not quite big enough to access the bond market or the stock market, but they’re too big for the banks. This is where a BDC steps in.
It will create a relationship with the company and oftentimes loan them millions of dollars or even tens of millions of dollars at a time, and oftentimes at double digits of interest. When you invest in a BDC, you’re buying the common stock of a company that potentially has hundreds or even thousands of contracts out there, loans that they’ve made to companies where these companies are paying them high interest.

And much of that interest is gonna be returned to you in the form of a dividend, and that’s where your income comes from. These are just a couple of examples of other fixed income investments that are not bonds. If I’ve piqued your interest and you’re starting to wonder whether or not having some portion of your portfolio invested for fixed income makes sense, well, in my book, More Life Than Money, I spend a lot of time talking about the difference between fixed income and bonds and some of these other investments that we just spent a few minutes discussing.
I’d like to send you More Life Than Money absolutely free of charge here on the Providence Financial Retirement Show, and you can get it by going to providencefinancialradio.com/book. Again, it’s
providencefinancialradio.com/book. Leave us your information, and we’ll send you a new copy of More Life Than Money. It’ll show up on your doorstep within just a few days. Again, to claim your free copy of More Life Than Money, just go to providencefinancialradio.com/book, and you’ll have it shortly.

I’m really glad that you’re with us today, and I certainly hope you’re enjoying the show. I’m Anthony Saccaro, and on The Providence Financial Retirement Show today, we’re talking about the window of opportunity that you have to lock in higher rates for a longer period of time. In our last segment, we talked about the difference between interest income and dividend income, and I wanna continue with that conversation when talking about the difference between the taxation of both.
Tax Advantages of Interest, Dividends, and Annuities in Retirement
We said that interest income comes from bonds and savings accounts and annuities, and this is gonna be taxed at regular income at your normal tax bracket. On the other hand, qualified dividends are gonna be taxed at a much lower rate, usually 15 or 20% for most people. When it comes to non-qualified annuities, they have some tax advantages that no other investment has for the most part.

The difference of how you are taxed is huge when you’re talking about 20 or 30 years of retirement. I heard someone recently say that tax planning in retirement is actually more important than your investments, and I actually think that that might be true, or at least just as important. Let’s spend a few minutes then and talk about the taxation of these different types of classes.
First, bonds. Interest from bonds and savings accounts and CDs, they’re added to your income, and they’re taxed at your bracket. If you’re in the 22% bracket and you earn $10,000 of interest on any one of these investments, you’re gonna pay 22% on that amount, which would be $2,200. This has to be also factored into the interest that you earn.
If a savings account’s gonna pay you four percent, but you’re gonna pay twenty-two percent of tax on that, you’re not gonna earn four percent, you’re only gonna earn a little over three percent. Most of the times, I see retirees forget to factor that in. Bond interest, though, is taxed at whatever your ordinary income tax rate is.
That’s just how it works. When it comes to stocks that pay dividends, the dividends are gonna be classified as either qualified dividends or non-qualified dividends. A qualified dividend is a dividend that generally comes from a US or qualified foreign corporation. You’ve owned the stock for at least sixty days around the time of the dividend payment, and it’s gonna be taxed at the preferential rate of generally fifteen percent to twenty percent, depending on your other income sources.

Non-qualified dividends are dividends that don’t meet that sixty-day holding requirement or dividends that come from REITs or other certain income sources, and those dividends are gonna be taxed at regular income at your full tax bracket. Because taxes are such an important part of retirement planning, if you’re gonna buy a dividend-paying stock, you really should know whether that dividend’s gonna be qualified or whether it’s not gonna be qualified, because the difference could be the difference of thousands of dollars or tens of thousands of dollars of lost money to taxes over your retirement.
When it comes to annuities, non-retirement annuities are taxed a little bit differently than either of these. When you put non-retirement money into an annuity, that money’s gonna earn interest, and that interest is gonna be piled back into the annuity over time, and the only time that you’re going to pay tax on that interest is when you make a withdrawal, and that’s really a nice benefit because it allows you to determine when to pay the tax.
If you have a bond, when the bond pays interest, you’re going to pay the tax that year whether you like it or not or whether or not you even use the money. That same concept also holds true with dividend-paying stock. But with an annuity, you get the opportunity to let the money sit there, and as long as that interest stays inside the annuity, you’re not paying any tax on it at all, and when you decide to make a withdrawal, you’ll only pay tax on the interest that was accumulated based on the amount that you withdrew.
Essentially, it puts the control of tax paying in your hands and takes it out of the government hands. This gives you a lot of flexibility. If you have a lot of money sitting in a savings account or high yield money market and you’re paying tax on that money every year and it’s just been sitting there ’cause you don’t know what else to do with it, not only might an annuity pay you higher interest like we talked about earlier in the show, but the tax benefits from the annuity for you could be astounding.
Might be something worth looking into. When it comes to these type of taxes though, you have to be proactive. You have to know that they exist, and you have to work with someone that can help you figure out what’s the best strategy for you. If you’d like to learn more, we’ve created a commission report that talks about proactive tax saving strategies, what you need to know to be able to minimize or reduce taxes in retirement by being proactive If you want this report, very easy to get.
All you need to do is go to providencefinancialradio.com/report. Again, it’s providencefinancialradio.com/report. Leave us your email address and other information, and you’ll have it in your inbox shortly. But you’ll learn some of the ways that you can be more proactive than you are being and how you might be able to save some money on taxes.
To claim your free commission report, just go to providencefinancialradio.com/report and you’ll have it shortly. I’m Anthony Saccaro, really glad that you’ve decided to join us today for the Providence Financial Retirement show. We’re talking about interest rates and the window of opportunity that retirees have that might disappear shortly, and that opportunity is the ability to lock in higher interest rates for a longer period of time.
We’ve already uncovered a lot in this show. We touched on annuities in a couple regards. We talked about the difference between bonds and bond funds. We talked about the difference between interest and dividends. We’ve even talked about the difference between how those are taxed and why that’s so critically important.

Building a Retirement Income Portfolio Strategy

Let’s take a few minutes, though, and get a little more practical. If you’re retired or about to retire, how do you put this all together? What should you be thinking about as far as getting income from your portfolio? I wanna spend a few minutes on this subject so you have a direction as to which way to go.
It really depends on what your timeframe is. The shorter your timeframe, the more conservative you probably should be. It also depends on your income needs. If you need income out of your portfolio, then your strategy’s gonna be different than if you don’t need any income at all. Let’s talk about timeframe for a second.
If you’re within five years of retirement and you have a portfolio that you’re gonna need to start drawing income from when you retire, you really have to be more conservative. If that portfolio is in stocks, you have no idea what that value is gonna be when you retire, and we’ve seen the stock market crash a lot in history.
Even in recent history, in the last twenty-five years, the stock market has had two crashes of greater than fifty percent, and a lot of professionals are worried that that could happen again. And if a big market crash happened before you retire, what impact is that gonna have on you? If the answer is none, then fine.
If the answer though is that it’s gonna have a lot of impact, then you probably wanna start getting more conservative, and that’s generally if you’re within five years of retirement or so. But even still, if you’re 10 years within retirement, you probably wanna develop a plan to start becoming more conservative over that time.
Once you get out over 10 years though, you have a lot more flexibility because you’ve got time on your side, and you can be a little more aggressive if that’s what makes sense for your situation. Your time horizon to retirement then is really a big factor in determining how you should be invested, whether you can be more aggressive or whether more conservative.
Another consideration though is how much income you’re going to need from your portfolio in retirement. If you’re not gonna need any income from your portfolio at all, then you could probably afford to stay more aggressive for longer. If the market crashes, you don’t need the income, you’ll have time to ride it out.
If you are gonna need income from your portfolio, as most of you are, then it may make sense to start shifting some of your investments to things that are gonna pay interest and dividends like we’ve been talking about here throughout the entire show. This way, you know that you’re getting your income from a source that you can rely on without having to cannibalize your principal.

Therefore, your time horizon, how long you have until retirement, and the amount of income you’re gonna need from your portfolio are both factors to consider when determining how to invest your portfolio right now. If you wanna learn more about these strategies, more about what you need to think in order to make good investment decisions today, in my book, More Life Than Money, that’s what I spent entire chapter five talking about.
You’ll learn how to get income from your portfolio without a lot of risk and without having to worry about running out of life before you run out of money. I wanna send you More Life Than Money free of charge, and all you need to do to claim it is go to
providencefinancialradio.com/book. Again, it’s providencefinancialradio.com/book. Leave us your information, and we’ll FedEx a hardcover copy of More Life Than Money right out to you, and you’ll be able to read it and get educated for yourself about what you should be thinking right now based on your situation.

One more time, to get your free copy of More Life Than Money, very simple, just go to providencefinancialradio.com/book and you’ll have it shortly. I certainly hope you’ve enjoyed the show. We’ve spent our entire show talking about this window of opportunity that you have now to lock in higher yields for a longer period of time.
We’ve touched on everything from bonds to bond funds, and we talked about annuities. We talked about the difference in taxation, and now we just wrapped up by talking about how you should be thinking when it comes to your own situation, how much of your portfolio should be in fixed income versus other things that are more aggressive.
Really glad that you’ve been here with us. My name is Anthony Saccaro. You’ve been listening to the Providence Financial Retirement Show. Have a great week everyone. God bless.

Disclaimer: This transcript is provided for educational and informational purposes only and reflects a general discussion from a live radio broadcast. It is not intended as personalized financial, tax, or legal advice. Individual circumstances vary, and listeners should consult a qualified professional before making decisions.