Generating Retirement Income When Interest Rates Are Low and Fixed-Income Assets are Overpriced

This is a topic that I’ve been struggling with as well. I’ll be taking a look at the potential strategy laid out in this article.

The Small Investor

Note:  This is a continuation on the series on retirement investing.  See the first post here.

Generating enough income to pay for expenses in retirement is a fairly simple thing (provided that account is large enough) when interest rates are reasonably high and bond and dividend paying stock prices are consequently low.  One can just select a set of dividend paying stocks such as utilities, buy a few bonds, and then collect the dividend and interest checks. If the income from these investments is large enough one will never needed to sell stocks to raise cash or touch most of the holdings at all.

When interest rates on quality corporate bonds are in the 8-10% range, and stocks paid 5-8% dividends, one can easily generate $50,000 per year on dividends and interest with a million dollar account.  Many people – foolishly, I believe – even invest their entire retirement…

View original post 992 more words

Advertisements
This entry was posted in Investing, Other Blogs and tagged , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s