Some Americans see fixed income investments, part of the debt-issuing credit market, as vehicles for the wealthy, or something you buy when you get older and no longer have a steady stream of earned income. That is an enormous mistake. Ask someone who was in their mid-50s or older during the turn of the century—who probably had the bulk of their retirement savings in stocks—if fixed income is only for the wealthy. In reality, as the stock market was plummeting in 2001, many Americans had to extend their retirement plans out for years. Many never recouped what they lost during that time. A sound investment plan at any age involves the proper balance of all asset classes, to include the credit market. Doesn't it make sense to have a rock-solid, income-bearing investment sitting in your portfolio in the midst of a big market downturn? Something that will churn out an income stream in good times and bad? Understanding the nuances of a fixed income "ladder" to help protect your portfolio will have an enormous impact on your well-being in retirement, no matter what your current age.
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