A lasting stream of income during retirement is crucial for any retirement plan. To help that purpose, bond mutual funds are one of the great options. The total return on Income-producing investments is something that a long-term bond mutual fund would provide. They are also great tools for stable income production.
As for the steady stream of income, each bond in the fund makes interest payments to the fund. Based on the total market value of the fund and then divided by the total number of outstanding shares, the bond mutual funds pay dividends to investors. In fact, bond funds may make monthly or quarterly dividend payments.
On the other hand, it is argued that these do not come with high returns. However, while there are arguments against holding bond funds in a retirement portfolio, not many would disagree about the importance of diversifying a portfolio. For the purpose of safety, the stream of income and a cushion against volatility, holding a decent share of bond mutual funds over the long term for retirement portfolio is always a prudent move.