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adjusting to new reality and need help
Old 01-29-2012, 10:40 AM   #1
Confused about dryer sheets
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Location: Wichita
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adjusting to new reality and need help

We live in Kansas and since we hate it here, and its going down hill in Wichita [Boeing pulling out and collapse of the air industry] we have sold our home in Kansas and bought a home in Florida. We have a closing date of this week on selling our home here and a closing date of Feb. 25th there. We are going to rent here for a couple of months and my wife will put in her notice on her job a couple of weeks before we move.

Our situation is we have 1.3m in investments of mostly CDs. of that in IRAs stocks like ED,BP,and some mut funds. My CDs bring in 4 to 5% a year but now with jumbos bringing in 1.71% we have to do something else.

We have been very Conservative and were happy with 5% when the market was bringing in 15 and higher all the time. So I am looking at investing in stable stocks like ED,CPL,AEP,MRK,PFE,BP,SO,XDM,DUK,RDSA,WIN,BMY,MO. I was thinking of doing 20k in each and most of them pay 4 to 5 percent dividends. I was used to getting a monthly check from my CDs and since Florida has no guarantee that my wife can find even an entry level job in banking to get health care and a small income to offset any bills we have I need to invest to bring a level of income to not only increase my balance but to live on. I can live on 40k a year and save some of that and do fine. If I live on the 1.3 M with no interest or dividend than I can go till I am 80, and use SS as a cola for any inflation. But I would rather live off of dividends.

I am a novice at this and have just done the simple interest CD rates over the years, so any help you pros can give me would be appreciated. Thanks.

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Old 01-29-2012, 02:14 PM   #2
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I'm sure you'll get lots of good advice. I'll start in by noting that there's considerably more risk in stock, even large cap dividend paying stocks, than in your CDs. That said, I think you are on the right track. Putting part of your portfolio in dividend paying stocks as part of a broader asset allocation scheme is a perfectly fine idea.

I suggest that you look into mutual funds to take on some of the work of managing a portfolio for you. There are a number of dividend oriented mutual funds with low expense ratios out there, for example:

Put some of the portfolio into a stock fund like this, and some into an intermediate term bond fund (to mitigate risks related to possible future interest rate increases) with a low expense ratio, and you'll be good to go. is a good board to use in setting up a low cost retirement portfolio. Their Wiki covers a lot of questions, and you can get some very good critiques of portfolios there (just make sure to present the portfolio in the format suggested in he Wiki).

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Old 01-29-2012, 02:20 PM   #3
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At 40k on 1.3m you're talking about a bit over a 3% withdrawal rate, which is pretty modest so it should be doable. With a $1.3m portfolio, I would favor mutual funds for diversification rather than individual stocks and an AA of 40-60% equities and the rest fixed income.
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Old 01-29-2012, 03:48 PM   #4
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Welcome. You will get many folks willing to answer questions and provide advice and share experiences. However, my advice is to perhaps take some advice for the next couple of months, and take that time to start a study program on retirement funding and investments. Perhaps once you get set in Fla, you may want to find a professional to help set up some basics. While there is lots of very smart people willing to offer advice and suggestions, no one here will be short of funds if the advice doesn't work out as expected. If you are new to retirement, I would suggest you think of it as a career change, now your job is to manage your investments. Good luck and please ask many questions.
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Old 01-29-2012, 04:48 PM   #5
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I used to live in Wichita back in the mid 80's. Sorry to hear it is going so down hill. I always thought it was a decent place. Mostly we always thought the people there were very nice. Actually I was glad to leave because there was not a great deal to do in such a small (mid) sized town. Used to love going into KC. But we have never had the neighbor friends anywhere else like we had back in Wichita.

Good luck on your move and your retirement plans.
“Of all the paths you take in life, make sure a few of them are dirt.” John Muir
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Old 01-29-2012, 05:06 PM   #6
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edteach, I want to chime in to support those suggesting you devote adequate time to educating yourself on managing the investments in your retirement nest egg. I especially agree with the advice you've been given regarding using mutual funds rather than individual stocks as your investment of choice.

Moving from CD's to individual stocks is a huge leap in risk - at least to my way of thinking. Individual stocks require considerably more scrutiny, research and time commitment to monitor than do mutual funds (or EFT's). The added risk factors to manage a portfolio of individuals stocks is something you need to give careful consideration before going down that road.

PS - We were happy residents of Wichita in the mid-70s. Sorry to hear things have gone downhill.

Numbers is hard.

Retired in 2005 at age 58, no pension

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