William is looking to invest money to generate some additional income for his retirement. At 65 years old, stability and security are the most important factors for him. As such, the best investment option that would meet William’s needs is fixed income investments like bonds, CDs, or annuities. These provide steady cash flow without too much risk of losing principal.
Fixed income for retirement stability
William is nearing retirement age and does not want to take on significant risk with his investments. He needs his money to last for 20+ years in retirement. A smart portfolio at his age consists largely of fixed income like government and high-quality corporate bonds. These pay reliable interest while protecting his initial investment. William should also consider laddering CDs and and annuities to generate stable monthly income streams.
Low-risk nature preserves principal
With fixed income investments like bonds and annuities, William’s original principal is mostly protected. Unlike stocks, these asset classes do not tend to experience big price swings. This means William’s initial investment and interest earned on top are safe. He does not have to worry about market downturns eroding the value of his holdings right before retirement.
In summary, fixed income products like bonds and annuities can reliably generate the supplemental retirement income William seeks, while preserving his investment principal through low-risk cash flows. This stability suits his objectives and risk tolerance at age 65.