Investing in Bonds for Dummies by Wild Russell;

Author:Wild, Russell; [Wild, Russell]
Language: eng
Format: epub
Publisher: John Wiley & Sons, Incorporated
Published: 2023-07-28T00:00:00+00:00

Lining up your bucks

The gods of retirement offer you a number of options for putting cash in your wallet. If you’re one of those lucky Americans who can still bank on a solid fixed pension with health benefits (I’m looking at you, retired senators and executives in the pharmaceutical industry), that’s great. Social Security, when you’re gray enough, can also provide steady cash, although at the time of this writing, it looks like Social Security may need to start slashing certain benefits within a little more than a decade. Possibly.

Because this is an investment book, I spend the rest of this chapter and Chapter 7 talking about the money you can tap from your savings. Most of us who aren’t retired senators will need this money to retire, and it can come from one or all of three sources: interest, dividends, and/or the sale of securities. Your choice among these options or some combination of the three will have a great bearing on how big your portfolio needs to be and how much you can safely withdraw.

The best option — always — is to adopt a cash withdrawal plan from your portfolio that’s flexible and potentially allows for all three sources of cash flow to play into your new paycheckless life. One of the biggest and most common investment mistakes that people make is to lock their sights on one form of cash flow (typically, interest income) and ignore the others.

Toward the end of this chapter, I show you how a flexible, sensible, triple-source-of-cash-flow plan works. First, allow me to introduce you to each of the three options I just mentioned and explain why the gods of retirement created them, where to find them, and how to maximize them.

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