DIVIDEND INCOME FUNDS Often individuals will purchase stocks or dividend-yielding stocks that provide them with an alternative income stream. For retirees that are looking to minimise their risk against a volatile market, dividend income funds can provide a steady income over the years, especially if companies decide to raise their dividend payouts. Dividend income funds often consist of a fund manager that manages the fund and the dividend-paying stocks, which makes it a more suitable choice for any person, even if they have no prior trading or investing experience. In some instances, companies will allocate dividends that may be taxed at a lower rate compared to that ordinary income or interest. In this case, these dividends are classified as “qualified dividends” and should be held in non-retirement accounts or funds. REAL ESTATE INVESTMENT TRUSTS In 2020, around 58.1% of workingage baby boomers, between the ages of 56 and 64 were most likely to own at least one type of retirement account. Often, working individuals who are soon to retire will either have an IRA, Roth IRA, or a standard 401(k). While these products can produce significant savings for retirees, investing in real estate, or at least in a real estate investment trust allows them more opportunities to grow their wealth and their retirement portfolio. Like a dividend mutual income fund, a REIT is a mutual fund that either owns or invests in real estate property. These funds are typically managed by a team of fund managers, and in most instances, investors are allocated an income as the fund matures over time. REITs are a simpler, yet a safer option for retirees, as it allows them a better chance to invest in property and real estate, without directly exposing themselves to market volatility. Think of it as a way to increase your savings and wealth, regardless of whether you’re planning to use those savings to build your dreamhome or relocate abroad to Canada or somewhere exotic - REITs often provide better security for pensioners. ANNUITIES When planning to invest in annuities, it’s best to consider the two types of annuity products that are available. 58.1% “In 2020, around of working-age baby boomers, between the ages of 56 and 64 were most likely to own at least one type of retirement account.” Bank i ng & F i nanc i a l Se r v i ce s 36 Finance Monthly.
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