Investing In No-Load Mutual Funds To Generate Retirement Income

no load mutual fundMany people struggle generating lifetime retirement income.  Although many ask, “How much can I get from my 401(k) plan once I retire?” not everyone is equipped to manage their retirement income.  Most retirees withdraw from their savings what they think they need to meet their everyday expenses not realizing their savings need to last their lifetime.  Others, without knowing it, withdraw more than necessary leaving them nothing when they still have many good years of life left.

What are the options to make sure that you have enough retirement income?  There are myriad ways and one of them is by investing your retirement savings and only using the interests and dividends.  Of course you would say, “Is that it?”

This is not a foolproof option but it works.

You can begin by investing in a no-load mutual fund balanced between stocks and bonds.  No-load mutual funds are free of sales charges (loads), but they do have costs. All share classes of funds – load or no load – carry fees that are paid out of the fund’s assets to the fund’s investment advisors (as opposed to paying the advisor/broker who sells the fund). In other words, investors see these fees as a reduction in their net returns versus an expense on their bank or brokerage statement.

Fees and expenses vary greatly from fund to fund and may range from less than .10% to more than 2.00%, depending on the investment style, market capitalization, fund assets, fund company and share class of the fund.

You can estimate the amount of annual income you’ll receive by looking at the dividend distributions from the fund in the last year. Be sure to exclude capital gains distributions.


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