Tag Archives: Investing

Five retirement income planning tips. | New York Life

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Save, invest, start early and delay retirement as long as possible are the conventional points of wisdom about retirement planning. But an investor should also consider what their income needs will be in retirement.

Here are some tips to move your thinking from saving for to living in retirement:

THINK INCOME, NOT JUST DOLLARS SAVED.
Instead of focusing on a target number (i.e., “I want to save $500,000 by age 60”), think about income. 

  • What are your monthly expenses and are you able to cover them?
  • Do you plan to downsize? Or would you like to treat yourself to some luxuries in retirement? Do you want travel?
  • Do you want to leave a legacy to your family?
  • How will your savings fare against inflation?
  • There are many great online tools to help you nail down those details—take a look at some of our planning tools.
      • REVISIT YOUR INITIAL WITHDRAWAL RATE.
      You may start off your retirement with certain needs, but those needs inevitably will change. Make sure you evaluate your withdrawal rate with your financial professional at least annually to make sure you are not drawing too much or too little, and are taking life changes into account.
      TO TAKE OR NOT TO TAKE SOCIAL SECURITY.
      Deciding when to take Social Security varies by individual. Conventional wisdom suggests taking Social Security as late as possible, but that may not be the best decision for you, depending on your health, marital, and financial status. A financial professional can help you determine your ideal time.
      TRANSITION YOUR PORTFOLIO FOR RETIREMENT.
      Build in time to make necessary changes to your portfolio before you retire. That way you are ready and are not making any unnecessary shifts during retirement. In general, a retirement portfolio is less about growth and more about income.
      PLAN FOR A LONG LIFE.
      Life expectancy is on the rise, thanks to advances in health care. This means your money will have to last longer. Consider long-term income vehicles, such as fixed immediate annuities, that provide a steady stream of income for life.
      Making sure you have enough income to live comfortably can help ensure that you don’t tarnish your golden years. By using these tips, you can plan today for a better tomorrow.
      — Read on www.newyorklife.com/articles/5-retirement-income-planning-tips

    10 BDCs to Buy for Big-Time Income

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    Business development companies (BDCs) were literally designed with dividends in mind. These 10 BDCs to buy yield up to 10.9%.

    Business development companies provide firms with debt and equity capital, or a combination of the two, to help them grow. Many of the largest BDCs available to investors today provide equity and debt financing to middle-market companies, a considerable number of which operate industrial businesses with stable cash flows.

    They first came to be in 1980 when Congress passed an amendment to the Investment Act of 1940 that created a new category of closed-end investment company: BDCs.

    For tax purposes, BDCs must pay out 90% or more of their taxable income in the form of dividends so they can retain the tax benefits of regulated investment companies. BDCs may raise their dividends in boom times, however it’s not uncommon for some to cut their payouts depending on the business environment.

    BDCs have become popular with retail investors over the past decade because of the significant income they generate. These companies often yield more than 8% on their distributions.

    One thing to pay attention to when evaluating BDCs is costs. Externally managed BDC pay advisory fee and typically pay a low double digit percentage of returns or profits to the fund advisory manager. Internally managed BDC do not pay advisory fees. It does, however, incur the operating expenses of employing investment professionals to do investment analysis, research and other duties.

    — Read on www.kiplinger.com/slideshow/investing/T018-S001-10-bdcs-to-buy-for-big-time-income/index.html

    7 Secrets of Highly Successful Investors | Kiplinger’s Personal Finance

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    Prosper in this volatile market (or any other) by focusing on fundamentals.

    In investing, it’s as important to practice good habits as it is to avoid bad ones, and the stakes have rarely been higher. The longest bull market on record is in its 11th year, volatility is sky-high, the economy is uncertain and market sentiment is skittish.

    But long-term investors should rise above the fray and focus on the fundamentals. You already know you shouldn’t buy stock on a tip from your Uncle Fred. But it’s even more important to set appropriate goals, save regularly and monitor your progress. Don’t beat yourself up for the occasional mistake. But if you follow the seven steps below, you’re likely to feel good about your portfolio over the course of a long investing career.

    — Read on www.kiplinger.com/article/investing/T023-C000-S002-7-secrets-of-highly-successful-investors.html

    2019 is shaping up to be one of the best years ever for investing |CNBC

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    This could be the first year ever where stocks, bonds, gold and crude oil all returned double digits, according to LPL Financial.

    The S&P 500 has returned nearly 22% in 2019 while gold and crude are sporting returns of 16.1% and 17.8%, respectively. Treasuries are right on the cusp, with the the 10-year Treasury note up more than 9%

    Through Wednesday’s close, just 75 stocks in the S&P 500 were down for the year while 361 were up at least 10%.

    Assets have gotten a boost from lower Federal Reserve rates as well as generally strong consumer spending.

    apple.news/Abj06unJ3Spyw9e2vT69CyQ

    Women’s Other Economic Gap: Financial Acumen – WSJ

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    A recent survey conducted by UBS found that only 23% of women globally take charge of long-term financial-planning decisions. And it isn’t a generational problem: 56% of women aged 20 to 34 defer to their spouse compared with 54% of women over 51 years of age.

    A report from the Financial Industry Regulatory Authority suggests that women’s financial understanding is going in the wrong direction, too. Baby boomer and Generation X women revealed higher levels of financial literacy than millennial women based on a five-question quiz.

    — Read on www.wsj.com/articles/womens-other-economic-gap-financial-acumen-11567432800

    Here’s What Warren Buffett Really Thinks About the Economy | Money

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    The Oracle of Omaha says the U.S. economy has plenty of runway left before the next recession. “Right now, there’s no question: It’s feeling strong. I mean, if we’re in the sixth inning, we have our sluggers coming to bat right now,” Buffett said in an interview with Becky Quick on CNBC’s “Squawk Box” Thursday morning.

    Buffett added: “Business is good. There’s no question about it.”
    — Read on money.com/money/5304816/warren-buffett-just-made-a-surprising-prediction-about-the-economy/

    Dow Jones Industrial Average Battles Back as Recession Fears Recede – Barron’s

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    The Dow dropped more than 3% on Tuesday and Wednesday on fears of a recession, making it the worst start to a quarter since 2008. A more optimistic view prevailed by the end of the week.
    — Read on www.barrons.com/articles/dow-jones-industrial-average-battles-back-as-recession-fears-recede-51570238255

    Sequence of Return Risk & Your Nest Egg | Personal Capital

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    Sequence risk refers to the order or the timing in which your investment returns occur. It specifically relates to the risk of early declines and ongoing withdrawals impacting your spending during a certain period of time, most often in retirement.
    — Read on www.personalcapital.com/blog/retirement-planning/sequence-return-risk-your-nest-egg/

    The Social Security timing debate | Vanguard Blog

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    Social Security benefit may be subject to 1 of 3 potential tax treatments depending on your income at the time you collect:

    It won’t be subject to federal income tax.
    Up to 50% of it will be subject to federal income tax.
    Up to 85% of it will be subject to federal income tax.
    Let’s say you retire at age 62 and cover your living expenses by taking withdrawals from a tax-deferred retirement account—a traditional IRA. The amount you withdraw from your traditional IRA will lower your account balance. This may reduce your future required minimum distributions (RMDs), which are calculated by dividing your retirement account balance (as of December 31 of the previous year) by the IRS’s life expectancy factor.

    Since your RMD is considered ordinary income, smaller distributions can help you control your income when you begin collecting Social Security at age 70.

    if you defer your benefit until you’re age 70 and live until age 90, you’ll collect $652,560 in Social Security over the course of your lifetime. If you don’t defer your benefit and begin collecting at your full retirement age (66), you’ll collect almost $80,000 less over the course of your lifetime.

    Lifetime benefit based on age you collect

     

    Note: Example excludes inflation.

    The choice is yours

    A timeless debate perseveres because it’s a fair fight—both sides of the argument hold water. Folding your pizza makes it easier to eat; not folding it makes it last longer. Cats are independent; dogs are loyal. No matter what you call it, a sandwich is delicious—so just enjoy it. Taking Social Security at full retirement age means you may be able to preserve other financial resources; deferring until age 70 means you’ll get more money when you do collect.

    Several personal factors will likely influence when you decide to collect Social Security. At the risk of sounding morbid, you won’t know whether you’ve truly made the “right” decision until it’s too late. So the best advice I have to offer is to choose your Social Security start date based on the facts you know right now. If you get a good night’s sleep after you’ve made your decision, you’re on the right track.

    *Source: longevityillustrator.org, supported by the Society of Actuaries.
    — Read on vanguardblog.com/2018/05/30/the-social-security-timing-debate/

    Americans’ Confidence in Their Finances Keeps Growing

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    Americans’ optimism about their personal finances has climbed to levels not seen in more than 16 years, with 69% now saying they expect to be financially better off “at this time next year.”

    The 69% saying they expect to be better off is only two percentage points below the all-time high of 71%, recorded in March 1998 at a time when the nation’s economic boom was producing strong economic growth combined with the lowest inflation and unemployment rates in decades.
    — Read on news.gallup.com/poll/246602/americans-confidence-finances-keeps-growing.aspx