Need to generate income
Need to generate income
Hello everyone, I am new here but am invested in vanguard funds for years. I am 53 and have about 210,000 in funds and a few stocks. I have been on disability for 8 years now and have come to the point where i need to generate maximum income from my portfolio. Any thoughts would be appreciated. I know i could buy stock in ATT for example and generate 12000 a year in dividends but obviously that isn't a good idea to be in one stock. I also can't find a cfp in my area that will help me with my issue because of my age and what i am trying to do. Thanks again for any suggestions.
- Sandtrap
- Posts: 19591
- Joined: Sat Nov 26, 2016 5:32 pm
- Location: Hawaii No Ka Oi - white sandy beaches, N. Arizona 1 mile high.
Re: Need to generate income
It does not sound like you can afford lose of principal in the pursuit of greater returns.
You may or may not be a candidate for an SPIA. (do not consider any other type)
Check some quotes here:
Immediate Annuity Calculator
https://www.immediateannuities.com/a/an ... gJwuvD_BwE
j
You may or may not be a candidate for an SPIA. (do not consider any other type)
Check some quotes here:
Immediate Annuity Calculator
https://www.immediateannuities.com/a/an ... gJwuvD_BwE
j
Re: Need to generate income
Welcome to the forum.
If you tried to print every thread that addresses some form of this question the paper generated probably wouldn't fit in your house, which is to say there are strong, differing opinions. However the fact will remain that you can only squeeze so much out of a fixed dollar amount. And you are right about holding one stock. Or even, IMO, a larger number of hand-picked stocks.
I recommend you define for us and for yourself exactly what you need, and then we might be able to help you get there. $12k per year from 210k isn't plausible indefinitely, for example. But maybe you only need it until you take social security?
If you tried to print every thread that addresses some form of this question the paper generated probably wouldn't fit in your house, which is to say there are strong, differing opinions. However the fact will remain that you can only squeeze so much out of a fixed dollar amount. And you are right about holding one stock. Or even, IMO, a larger number of hand-picked stocks.
I recommend you define for us and for yourself exactly what you need, and then we might be able to help you get there. $12k per year from 210k isn't plausible indefinitely, for example. But maybe you only need it until you take social security?
Re: Need to generate income
The disability I’m on is from social security. I’m not trying to generate 12000 a year in income that was just an example. But I’d like to try and get as much as I can per month while still having some growth involved. I won’t consider an annuity because then that money is gone forever. I thought I might get some ideas on funds to buy that generate the most yield and income. Thanks for the response.
Re: Need to generate income
What does that mean? What does your age have to do with anything?
Does it mean that you can't find a CFP? Does it mean that you can find CFPs, but they aren't telling you what you want to hear?
This isn't just my wallet. It's an organizer, a memory and an old friend.
Re: Need to generate income
Yes, I have contacted cfp in my area and I get the same answer. What I’m trying to achieve at my age isn’t possible so they say and I’m told we can’t help you.
-
- Posts: 1772
- Joined: Sun May 13, 2018 3:41 pm
Re: Need to generate income
I think it is best to focus on total return instead of income. Wold you rather have an investment with a total return of 4 percent paying out 3 percent in income or an investment with a total return of 6 percent paying out 2 percent in income? I think a three fund portfolio is way better than trying to find a stock or fund that pays out a large yield.
Re: Need to generate income
I’ve looked at vanguard managed payout fund and their reits and other funds not sure which way to go. I’ve thought about contacting vanguard personal advisor to hear their thoughts
Re: Need to generate income
Vanguard has a very good income fund called Wellesley Income Fund. It has very low expenses, good management, and a great track record.
Past returns do not foretell the future, but this is a solid choice for some growth and income. It is conservative at 35-40% stocks and the rest
in corporate bonds. You could do the same with a mix of Total stock market and Total bond market, but the income may not be quite as high.
Good luck with your selection. Seek free advice from reliable sources(Vanguard and Bogleheads) as you don't need to give away 1% to an adviser
for this decision,
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” |
— Warren Buffett
Re: Need to generate income
That’s why I’m on here, hoping for some good free ideas. Thanks for yours.
Re: Need to generate income
I would rethink your aversion to an SPIA for at least part of your portfolio.
Gill
Gill
Cost basis is redundant. One has a basis in an investment |
One advises and gives advice |
One should follow the principle of investing one's principal
- Youngblood
- Posts: 712
- Joined: Fri Jan 04, 2008 6:18 am
Re: Need to generate income
I agree with the above suggestion.
+1
"I made my money by selling too soon." |
Bernard M. Baruch
Re: Need to generate income
I have looked into immediate annuity. At my age I’d have to give them my entire portfolio to receive around 600 a month. I’m not sure that is a good idea but I’m willing to check it out again
Re: Need to generate income
Does your social security cover all of your needs? If not, what additional amount of $ is required to meet this threshold? You might consider a SPIA for this needed amount and invest the rest based on your risk tolerance.
Do you have a budget or a sense that more is coming in than going out? I am concerned that in the OP that you "have come to the point where i need to generate maximum income from my portfolio." I am not sure if you are able to work, but you certainly can work and generate a little income while on social security disability. I think you're OK under SSI rules if you make < $1,180/month (or $1970/month if you're blind).
https://www.ssa.gov/pubs/EN-05-10095.pdf
Do you have a budget or a sense that more is coming in than going out? I am concerned that in the OP that you "have come to the point where i need to generate maximum income from my portfolio." I am not sure if you are able to work, but you certainly can work and generate a little income while on social security disability. I think you're OK under SSI rules if you make < $1,180/month (or $1970/month if you're blind).
https://www.ssa.gov/pubs/EN-05-10095.pdf
- CyclingDuo
- Posts: 6009
- Joined: Fri Jan 06, 2017 8:07 am
Re: Need to generate income
On a base of $210K, it would be possible to generate $12K a year of income. It would move you out of the realm of Boglehead index or fund investing and into the realm of income producing investing through dividend paying individual stocks spread out in holdings via REITs, Utilities, Telecoms, Preferred's, MLP's, etc... .canada65 wrote: ↑Sun Jul 15, 2018 6:43 am The disability I’m on is from social security. I’m not trying to generate 12000 a year in income that was just an example. But I’d like to try and get as much as I can per month while still having some growth involved. I won’t consider an annuity because then that money is gone forever. I thought I might get some ideas on funds to buy that generate the most yield and income. Thanks for the response.
Boglehead member Bruce Miller has an excellent primer on that strategy:
https://www.goodreads.com/book/show/234 ... ncome-only
There are a lot of good contributors at SeekingAlpha.com, but George Schneider targets exactly what you mention - how to fill the gap between the income you are receiving from your SS and meet your income needs via dividends.
https://seekingalpha.com/author/george- ... r_articles
"Save like a pessimist, invest like an optimist." - Morgan Housel |
"Pick a bushel, save a peck!" - Grandpa
Re: Need to generate income
Unfortunately working isn’t a option. No my disability payment doesn’t cover everything. I wish it did.
-
- Posts: 3579
- Joined: Fri Jul 19, 2013 2:45 pm
Re: Need to generate income
Do any of the retirement income funds generate enough for you?
Re: Need to generate income
What is the monetary shortfall between disability and what you need?
Very little is needed to make a happy life; it is all within yourself, in your way of thinking. -Marcus Aurelius
Re: Need to generate income
It appears from your posts that you do understand the nature of fund returns. To wit: there is no difference in income generation from dividends or selling a fraction of your shares. The pursuit of a high divedend funds based on this misunderstanding puts you at risk for bad investment decisions.
Re: Need to generate income
Any suggestions you can offer would be appreciatedautopeep wrote: ↑Sun Jul 15, 2018 9:10 am It appears from your posts that you do understand the nature of fund returns. To wit: there is no difference in income generation from dividends or selling a fraction of your shares. The pursuit of a high divedend funds based on this misunderstanding puts you at risk for bad investment decisions.
-
- Posts: 3579
- Joined: Fri Jul 19, 2013 2:45 pm
Re: Need to generate income
That's about a 4% withdrawal which should be supported by something like the three fund portfolio or a balanced fund of your choice. You might look up the discussions on McClung's Prime Harvesting techniques as well.
Re: Need to generate income
+1
Re: Need to generate income
Any opportunity to sell small stuff on eBay? Minimal physical effort required.
Re: Need to generate income
canada65 wrote: ↑Sun Jul 15, 2018 9:22 amAny suggestions you can offer would be appreciatedautopeep wrote: ↑Sun Jul 15, 2018 9:10 am It appears from your posts that you do understand the nature of fund returns. To wit: there is no difference in income generation from dividends or selling a fraction of your shares. The pursuit of a high divedend funds based on this misunderstanding puts you at risk for bad investment decisions.
You have received good advice in this thread. My only suggestion is to not equate income with dividends but to rather think about withdrawal rate (a combination of dividends and selling shares)
-
- Posts: 731
- Joined: Thu Nov 26, 2015 12:59 pm
Re: Need to generate income
I just input monthly income of 700 for 53 year old male at https://www.immediateannuities.com, and they are quoting a premium of 155,601.
Does that 210k exclude your emergency fund? If so, I would be tempted to buy the SPIA and keep the rest of the 210k in stocks to hopefully keep up with inflation.
Still, that's giving up roughly 74% of the portfolio for a payout that inflation will erode over time...
Re: Need to generate income
Thanks to all for the ideas and info.