A Well Formulated Retirement Plan Ensures Affluence and Joy 

Regarding retirement planning, U.S. citizens are way behind. As of 2019, most households headed by men or women above fifty-five years of age have not opted for any retirement plan, as per data published by the U.S. Government Accountability Office. Many people rely on social security to pay utility bills and to live, but retirement plans can redefine this phase of life. In retirement, your home could turn out to be the greatest revenue generator; financial advisors San Antonio could determine would be judicious to pay the mortgage and use the proceeds for an investment property that could become an alternative source of income.

Individual Retirement Accounts

Not every employee is entitled to employer sponsor retirement plan; even if you have one, some additional funds beyond the annual 401(k) contribution limit will add size to the corpus. If you want to supplement the retirement plan, then an annuity and Individual Retirement Accounts (IRAs) could be the perfect instruments. Any individual with taxable income can open a conventional IRA account where the revenue generated is tax-deferred, and the contribution to the scheme is tax-deductible. Any person with $144,000 or less in earnings and with a cap of $214,000 for a joint couple filing a Roth IRA account could be operative. Under this scheme, the amount can be withdrawn before maturity without penalty, and the earning and payouts are tax-free. A financial advisor will provide details information and benefits of an IRA account.


Though there are several types of available annuities in the market, fixed is assumed to give the most return. An annuity is an insurance policy that assures a return on retirement age. Clauses attached to fixed annuities are simpler than other contracts, such as variable or indexed contracts. Fixed annuities mostly come with death benefits, where a predetermined sum is paid to the beneficiary if the insured passes away. Moreover, the growth is tax-deferred and assured. Another advantage is there is no cap, unlike IRA, so you can invest as much as possible.

Investment portfolio

An investment portfolio built by a proficient financial advisor is inclusive of real estate, bonds, equity, and a certified retirement plan. The financial advisor makes sure the portfolio is well-balanced and, to a certain degree, protected from market volatility. Equity is often a major component of a portfolio, and its value increases as the net profit of the explicit company rises. The dividend yield is another factor when equity is included in a retirement investment portfolio. A sovereign bond is the safest instrument where the issuer, the government, promises to pay the amount on the maturity date with a preset interest rate. As the risk factor is minimal, it offers a lower potential return.

An income portfolio is preferred over a growth portfolio when it becomes a part of a retirement plan, as it is more focused on securing regular income than growth potential. Equities with higher dividend yield are included in the portfolio rather than volatile shares with potent value appreciation. Value portfolio promises immense growth as during the economic slowdown; many blue chip shares are traded undervalued. A financial advisor identifies and includes such shares in a value portfolio where the traded price is deemed to be much lower than the fair market price.

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