Dan Celia
Financial Issues
September 2014 – Q: I am 67, and I have always thought I would be able to live off the interest of my CDs. What do I do now that my CDs are earning next to nothing?
A: First, resist the pressure to put your savings at risk. You will need that money to live on. You should certainly have some income-producing stocks, such as utility stocks in order to supplement your income. But it would be a mistake to risk the bulk of your life savings in the market. Since everyone needs income,
I suggest that you consider a charitable gift annuity, plus a few solid stocks to generate some income. But, only invest a portion of your savings. With volatile years ahead, you must have a “preservation of principal” mentality and, unfortunately in these low interest rate environments, you will not be earning much on that cash.
To learn more, read an article I wrote titled A Case for Income. You can find it here. It contains important information for anyone who is nearing retirement or already retired.
____________________
Dan Celia has been in financial management for more than 30 years. He works closely with AFA Foundation and can be heard six days a week on AFR Talk (afr.net).
Financial Issues website
Email: [email protected]
AFA Foundation: 800-326-4543, ext 345