I’m 58 and hate annuities. How can I get dependable income in retirement?

For investors nearing retirement, generating dependable income is a top priority. The concern about annuities is understandable, given their complexity and often high fees. A Treasury Inflation-Protected Securities (TIPS) ladder offers an alternative approach to creating a predictable income stream. By investing in a series of TIPS with staggered maturity dates, an investor can create a ladder of bonds that mature at regular intervals, providing a relatively low-risk source of income.

A TIPS ladder can help mitigate interest rate risk and inflation risk, making it an attractive option for conservative investors. As interest rates rise, newly issued TIPS will offer higher yields, allowing investors to reinvest maturing bonds at more attractive rates. This strategy can provide a degree of protection against inflation, as TIPS are designed to adjust their principal and interest payments based on changes in the Consumer Price Index. For a 58-year-old investor looking to make their portfolio more conservative, a TIPS ladder may be a suitable alternative to annuities.

To watch next: The effectiveness of a TIPS ladder will depend on the investor's overall financial situation, risk tolerance, and income needs. Investors should consider factors such as their life expectancy, expenses, and other sources of income when implementing a TIPS ladder strategy. Additionally, it's essential to evaluate the current interest rate environment and inflation expectations when determining the optimal TIPS ladder structure. As the investor approaches retirement, monitoring and adjusting the TIPS ladder will be crucial to ensure it continues to meet their income needs.

Originally reported by marketwatch.com. FundNews adds analysis for finance & markets readers.