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About 2012 or so I got back into investing as I was approaching retirement. This time I concentrated on investments as a contributor to cash flow. Because income is what you need in retirement.
It was a multi-faceted approach. Had smartly bought a couple rental properties in 2011 at the near-bottom, got very knowledgeable on Social Security options, worked on transitioning all our retirement assets into a Roth from Rollover IRAs/41ks, and did a bit of budgeting.
The goal was to ensure we were spending less than we took in, and investing in income producing investments. Since we weren't spending much of anything of our investment income, it went up every month. Little by little.
At first it was dividend growth stocks, but as we got closer to actual retirement, we switched over to conservative but higher yielding products like Baby Bonds and Preferred Stocks.
So, since our primary measuring stick is income growth, not total dollars, the pullback isn't so painful. Hasn't lowered my income one bit. Our income has gone up $173 this month, and we should pick up another $40 on the 31st.
Got another $4,200 to re-invest. I stay pretty much fully invested. I usually do $1,000 a month. Already have my eyes on a preferred stock (HT-D) that's been beaten down for November. That will add another $82 in November. The goal is at least $83.33 a month increase which is $1,000 a year.
But we usually end up at least $150 or so which is $1,800 a year increase. And it gets easier every month, as things start to compound.
So, I tell anyone that will listen, that investing for income is the way to go.
About 2012 or so I got back into investing as I was approaching retirement. This time I concentrated on investments as a contributor to cash flow. Because income is what you need in retirement.
It was a multi-faceted approach. Had smartly bought a couple rental properties in 2011 at the near-bottom, got very knowledgeable on Social Security options, worked on transitioning all our retirement assets into a Roth from Rollover IRAs/41ks, and did a bit of budgeting.
The goal was to ensure we were spending less than we took in, and investing in income producing investments. Since we weren't spending much of anything of our investment income, it went up every month. Little by little.
At first it was dividend growth stocks, but as we got closer to actual retirement, we switched over to conservative but higher yielding products like Baby Bonds and Preferred Stocks.
So, since our primary measuring stick is income growth, not total dollars, the pullback isn't so painful. Hasn't lowered my income one bit. Our income has gone up $173 this month, and we should pick up another $40 on the 31st.
Got another $4,200 to re-invest. I stay pretty much fully invested. I usually do $1,000 a month. Already have my eyes on a preferred stock (HT-D) that's been beaten down for November. That will add another $82 in November. The goal is at least $83.33 a month increase which is $1,000 a year.
But we usually end up at least $150 or so which is $1,800 a year increase. And it gets easier every month, as things start to compound.
So, I tell anyone that will listen, that investing for income is the way to go.
If you don't want or require growth then it's fine, but investing "just for income" once one is retired is classic conventional wisdom that is flawed.
In rocky times, like we have now, it might sound good, but if you're looking at a 20+ year retirement time frame then investing "just for income" can leave your portfolio ravaged by inflation even if its just 2-3%.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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@Newporttom, +1
I imagine many near retirees are too caught up in investing for total dollar amount in their working years and fail to transition to income management until after a Market pullback.
If you don't want or require growth then it's fine, but investing "just for income" once one is retired is classic conventional wisdom that is flawed.
In rocky times, like we have now, it might sound good, but if you're looking at a 20+ year retirement time frame then investing "just for income" can leave your portfolio ravaged by inflation even if its just 2-3%.
It is all about total return . I will gladly pay anyone a percent more than they are getting in dividends and since all they care about is income ,then I keep the principal
If you don't want or require growth then it's fine, but investing "just for income" once one is retired is classic conventional wisdom that is flawed.
In rocky times, like we have now, it might sound good, but if you're looking at a 20+ year retirement time frame then investing "just for income" can leave your portfolio ravaged by inflation even if its just 2-3%.
All depends on what your plan dictates. If your forecast says you need growth then so be it; I'm a huge believer that your financial plan should dictate how much risk you should take.
All depends on what your plan dictates. If your forecast says you need growth then so be it; I'm a huge believer that your financial plan should dictate how much risk you should take.
I disagree...its the opposite. How much risk you can stomach should dictate your financial plan.
I disagree...its the opposite. How much risk you can stomach should dictate your financial plan.
I agree . You need to back in to the plan and resources you have . See what you can generate using the allocation you are comfortable with safely ,add in your other income and go plan a lifestyle around it .
You see people trying to plan around what their income was when working .
When those checks end your resources and pucker factor may have nothing in common with what used to be when you may have had 2 pay checks
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