Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 09-09-2020, 12:36 PM   #61
Thinks s/he gets paid by the post
 
Join Date: Jul 2013
Posts: 1,128
Quote:
Originally Posted by myself View Post
How so?
This is how so:

Quote:
Originally Posted by RetireBy90 View Post
Just remember GE and Pan Am, both stocks I owned thinking that dividend was a safety in case of shares declining, until they killed the dividends. I hope I have learned my lesson from these 2.
Fixed income serves a specific purpose in a portfolio. Equities are not a suitable replacement.
mrfeh is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-09-2020, 12:52 PM   #62
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 29,194
Quote:
Originally Posted by myself View Post
But aren't ETF's often taxable as regular income? I know that not all are, but dividend paying companies that pay "qualified dividends" - which are all of the dividend aristocrat stocks, the dividends are actually taxed at long term capital gains rates. So 0% on up to $80,000 for a married couple starting in 2020.
Not an ETF Exchange Traded Fund)... AGO.B is exchange traded debt... and is taxed as regular income just as the OPs CD interest is currently are taxed as regular income.

Dividend stocks, aristocrat or not, are still stocks and thus are subject to much more volatility than CDs.

Exchange traded debt is higher yield than CDs and less volatility than stocks. Another option would be preferred shares, which is good yield but less volatility than common stock and most dividends are qualified dividends.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...target 65/35/0 AA TBD
pb4uski is offline   Reply With Quote
Old 09-09-2020, 01:08 PM   #63
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 29,194
Quote:
Originally Posted by myself View Post
....To put it into better perspective:
  1. Buying 500 shares of AT&T on 6/1997 for $15,000 would yield you 1,000 shares because the shares doubled one time in 1998, and
    • $35,613 in dividends alone if you did NOT reinvest the dividends, and would be worth $50,613 and would pay you $2,080/yr currently
    • $52,165 in dividends alone if you reinvested all the dividends into AT&T stock at an average share price of $36/share, but the account would be worth $109,354 today and would be paying you $4,022/yr next year if they don't increase the dividend again
  2. Fixed interest investment 4% compounded annually would be about $36,970, so it would have paid $21,971 in interest

PS Edited many times to fix formatting and correct numbers.
I don't think that your numbers are right. The calculator on the AT&T website indicates that $15,000 invested on June 1, 1997 is worth $15,148.72 today without dividends reinvested.... not $50,613.

https://investors.att.com/stock-info...ent-calculator
Attached Images
File Type: jpg Capture.JPG (81.3 KB, 12 views)
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...target 65/35/0 AA TBD
pb4uski is offline   Reply With Quote
Old 09-09-2020, 08:20 PM   #64
Recycles dryer sheets
 
Join Date: Nov 2017
Posts: 214
Quote:
Originally Posted by myself View Post
Sorry if anyone else suggested this, I didn't read all the replies.

I'm just thinking that you could consider buying shares in a company like AT&T?
I don't know what the taxation you have would be, but right now they pay a 7% dividend and it keeps going up slightly (about 1.9%/yr) for the past 30+ years.
Obviously you shouldn't put all of your money in it, but let's say 1/4 of your money and only take 4% while it keeps growing by 3%/yr.

I know according to tax laws in the US, if it is in a taxable account that they are "qualified dividends", which means that it's at the Long Term Capital Gains tax rate.

Oh, and never bother selling the stock unless you have to, even if it dips down to $25/share, it's been at the same level as it is not for over 30 years.
Do you really think a retiree should put 25 % of their money in one stock?
JJpop is offline   Reply With Quote
Old 09-09-2020, 09:06 PM   #65
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 29,194
Quote:
Originally Posted by JJpop View Post
Do you really think a retiree anyone should put 25 % of their money in one stock?
Fixed it for you.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...target 65/35/0 AA TBD
pb4uski is offline   Reply With Quote
Old 09-09-2020, 09:08 PM   #66
Recycles dryer sheets
 
Join Date: Nov 2017
Posts: 214
Quote:
Originally Posted by pb4uski View Post
Fixed it for you.
I have a lot of other things that need fixing
JJpop is offline   Reply With Quote
Old 09-09-2020, 10:31 PM   #67
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 7,262
Quote:
Originally Posted by ShokWaveRider View Post
I had a chat to my BIL today, he has been retired for over 25 years and says the hardest thing was realizing he had to draw down on his savings to maintain his SOL after stopping W%#K. He was so used to maintaining or adding to his stash that it potentially going down was heartbreaking. He is used to it now at 83!

We have been retired for over 10 years and that is my problem. Our stash has always gone up in retirement. In this era of low interest rates it will no doubt go down.

Will it still go down once you are both on Social Security? If so, it seems like a short term issue or one you could change by taking SS sooner.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is online now   Reply With Quote
Old 09-09-2020, 10:44 PM   #68
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 5,341
Quote:
Originally Posted by pb4uski View Post
Similar story here... retired over 8 1/2 years ago... portfolio value today is about the same as when I retired... but have withdrawn and spent 38% of our retirement date portfoio balance... and 5% of that 38% was paying off our mortgage (would have only been 33% without the mortgage payoff).
And between the two of you, you have 22.5 fewer years of living expenses to fund.

I'm in a similar spot where I've got more money, fewer years of living expenses, and most specifically fewer years of child support left (zero) and fewer years of kids' college ahead of me (approximately 7 left out of 12) than when I started.

OP, what did your plan call for? I haven't been following this thread closely, but it seems like you're running into reinvestment risk, which is a predictable risk.

Did you not think about it, or think the risk was low, or have a contingency plan if the risk happened?
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is online now   Reply With Quote
Old 09-10-2020, 01:03 PM   #69
Confused about dryer sheets
 
Join Date: Jun 2017
Posts: 7
Quote:
Originally Posted by COcheesehead View Post
There is nothing wrong with spending capital, if you have a total return approach.
If you simply want to live off yield, you have a challenge with no great answer right now without taking on additional risk.
+1
Reese is offline   Reply With Quote
Old 09-11-2020, 02:30 PM   #70
Thinks s/he gets paid by the post
 
Join Date: Jun 2002
Posts: 1,298
Quote:
Originally Posted by ShokWaveRider View Post
I had a chat to my BIL today, he has been retired for over 25 years and says the hardest thing was realizing he had to draw down on his savings to maintain his SOL after stopping W%#K. He was so used to maintaining or adding to his stash that it potentially going down was heartbreaking. He is used to it now at 83!

We have been retired for over 10 years and that is my problem. Our stash has always gone up in retirement. In this era of low interest rates it will no doubt go down.
I periodically listen to a podcast called "The Retirement and IRA Show". It's done by a couple of very chatty guys who run a planning practice in Colorado focused entirely on retirement planning. I find their approach very interesting. They very often make the point that many of their clients have big problems making the mind-set change from accumulation to drawdown. For so many years we keep tracking our portfolios and watching them grow. Then when we retire we have a hard time realizing that seeing the portfolio become smaller to meet the very objective we grew it for in the first place is in the natural order of things.
__________________
friar1610
friar1610 is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Class of 2021 highlow65 Life after FIRE 455 Today 07:16 PM
Hello! 2021 might be my FIRE year LeeLee2021 Hi, I am... 6 09-03-2020 07:36 AM
final wishes dilemma - willing assets to a 13 year old workburnout Other topics 80 10-22-2017 10:33 AM
Last year of work--Dilemma sparkler Hi, I am... 21 07-07-2013 10:39 AM

» Quick Links

 
All times are GMT -6. The time now is 08:32 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.