Boomers: Boost your fixed income by up to 50%!

The title of this post certainly reads like a SPAM email but it turns out that there is in fact a pretty nifty way for baby boomers to boost fixed income in a relatively safe manner. The idea is to pay off your children's home mortgage and then issue them a mortgage yourself. If you pull money out of a corporate bond fund (which probably carries a similar, low, risk), you could see as much as a 50% gain in your return. From MSNBC:

"...instead of turning to the bond market, the client paid off his son's home mortgage and now has his son making mortgage payments to him instead of the bank. This way, the father earns 6% -- the interest rate on the son's mortgage -- compared with the 4% gain the Lehman Aggregate corporate bond index has posted this year.

Though not for everyone, this approach can be a way for baby boomers to get cash flow while still allowing their children to get the interest deduction for tax purposes. "Usually, we see parents helping children buy a house, but this time around the children can help the parents by giving them stable income in their retirement years while not costing the child anything," Little says.

This type of creativity is why baby boomers should consider a financial advisor. Financial advisors are not the exclusive domain of the super-rich. A very good idea for those in their pre-retirement years is to make a point of meeting with three such advisors. Even if they don't immediately hire one a great deal can be learned just from the interviewing process.

Special thanks to the always wise Talking Retirement for sourcing the story.