Today's income investors are being squeezed by low yields, more risks and rising taxes. It's time to cast a wider net while carefully balancing the trade-offs between yield and risk. Begin by considering the type of income you are looking to achieve.

What kind of income are you trying to generate?

Attractive Income with Lower Volatility

Striking a prudent balance between income and risk today requires widening the opportunity set by combining traditional and non-traditional sources. A flexible approach can help you balance the trade-offs between yield and risk.

Use flexible strategies

High Levels of Income

With rates near all-time lows, many investors are seeking opportunities in new areas to derive more current income from their portfolios. You can use an alternative approach to allocate across less-traditional strategies.

Seek high income

Growing Income

Equities with dividend growth are crucial to long-term income generation strategies. Your income portfolio can keep pace with rising costs over the course of a long retirement by investing in dividend-paying equities.

Grow your dividends

Tax-Advantaged Income

Municipal bonds have long offered investors the potential to generate income and save on taxes. Allocating to flexible strategies or efficient muni portfolios can help you find income in today's low yield, low growth environment.

Adapt to higher taxes


Understand the Risks in Today's Markets

Regardless of your income needs, the first step to building better income portfolios is an understanding of the rising risks in today's markets.

Chart: Risk in Income-Producing Portfolios Has Increased Dramatically

Morningstar and As of 12/31/13. Traditional core bonds represented by the Barclays U.S. Aggregate Bond Index.

Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses which may be obtained visiting the iShares ETF and BlackRock Mutual Fund prospectus pages. Read the prospectus carefully before investing.

Investing involves risk, including possible loss of principal.

Bond values fluctuate in price so the value of your investment can go down depending on market conditions. The two main risks related to fixed income investing are interest-rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds. Credit risk refers to the possibility that the issuer of the bond will not be able to make principal and interest payments.

There may be less information on the financial condition of municipal issuers than for public corporations. The market for municipal bonds may be less liquid than for taxable bonds. Some investors may be subject to federal or state income taxes or the Alternative Minimum Tax (AMT). Capital gains distributions, if any, are taxable.

There is no guarantee that dividend funds will continue to pay dividends.

The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

The Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).

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