Alternatives to Annuities for Reliable Retirement Income at 58
A 58-year-old seeking steady retirement income without annuities has options. A TIPS ladder is one strategy worth considering.
Retirement planning does not have to center on annuities, even for investors who want predictable, inflation-adjusted income in their later years. For a 58-year-old looking to shift a portfolio toward lower risk, financial advisers point to structured bond strategies as a viable path forward.
A Treasury Inflation-Protected Securities ladder — commonly called a TIPS ladder — is one approach that can replicate the income certainty many retirees seek from annuities. By purchasing individual TIPS bonds that mature in successive years, investors can lock in a stream of payments tied to the Consumer Price Index, effectively shielding purchasing power against inflation without handing assets over to an insurance company.
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The appeal of a TIPS ladder over an annuity lies largely in control and transparency. Annuities involve contracts with insurers and often carry surrender charges, complex fee structures, and limited liquidity. A TIPS ladder, by contrast, keeps assets in the investor's name and allows for adjustments if circumstances change — a meaningful distinction for someone with more than a decade before traditional retirement age.
At 58, a prospective retiree still has time to construct a ladder gradually, adding bonds over several years to spread interest-rate risk. The strategy pairs well with other conservative holdings such as short-term bond funds or cash equivalents, creating a layered income floor beneath a growth-oriented equity allocation that can address longer-term financial needs.
The right mix ultimately depends on individual spending needs, Social Security timing, and overall asset levels — factors that underscore the value of personalized financial planning. Continue reading at MarketWatch.com
