Obviously, the fact that you might be able to generate ongoing income with your investments is a big benefit of this strategy.
Obviously, the fact that you might be able to generate ongoing income with your investments is a big benefit of this strategy. Another benefit is that you can tailor this approach to meet your risk profile. For example, CDs come with very little risk. While the associated income isn't huge, it can be relied on. Downsides to this strategy can include having to keep up with inflation, potential losses that interrupt income streams and the impact of public policy and market forces on your income.