A. For retirees who delay their social security and other sources of guaranteed income, it is very important to have other sources of income, the following could be the major sources:
1. Blue-chip Stocks that Pay Dividends
You can invest directly in companies with a track record of paying increasing dividends, they can serve as a hedge against inflation as well. But be careful of companies with high yields, such as 8% of higher, as they might not be sustainable.
2. ETFs or Mutual Funds Invest in Dividend-paying Stocks
If you want to have a diversified portfolio of stocks that pay dividends, you can consider ETFs and Mutual funds that invest in companies that pay dividends. Some good ones include: T Rowe Price Dividend Growth (PRDGX), Vanguard Equity Income (VEIPX), Schwab US Dividend Equity (SCHD) and Vanguard High Dividend Yield (VYM).
3. Bonds
If you are a conservative investment, you should maintain 40% or more exposure to bonds. If you are in high tax bracket, make municipal bonds your core holding because the yields on munis issued by states and local governments tend to be lower than those of the bonds, but you won't owe federal taxes on the income.
4. REITs
REITS own and manage properties such as offices, apartments, and shopping malls, they must distribute at least 90% of their taxable income to shareholders. Also, REITs are a hedge against inflation.