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Retirement Planning for Those 50 and Older
For those over the age of 50 it is starting to get down to crunch time in terms of coming up with a solid retirement plan. The questions so many in this age bracket ask themselves are: 1) How much money do I need to retire comfortably? 2) When will my money run out in retirement? 3) What can I possibly invest in given how low interest rates are today?
Eli Lilly- Dividend Analysis
Even with the stock market rally of the past year there are still solid dividend paying stocks available. Many investors are concerned with another decade of slow growth and low to negative equity returns. However, one way to prepare for another decade of slow economic growth is to invest in high dividend yield stocks that have shown they can weather tough economic times and even increase their dividends while it happens. One such company is Eli Lilly and Company (LLY). With a dividend yield of 5.0% and a history of increasing dividends over time, LLY is one of my favorite dividend paying stocks.
Lower Your Tax Bill on REITs and MLPs- A look at American Capital Corp.
When investing in Real Estate Investment Trusts (REITs) or Master Limited Partnerships (MLPs), investors are sometimes surprised by the hefty tax bill. REITs and MLPs are taxed at ordinary income tax rates if they are in taxable accounts, which takes a big bite out of the total return for many. But there is a way to get around this tax bill if an investor has capital losses he can use. I call this strategy dividends to capital gains conversion.
Avoid Long-Term Fixed Income in Your Retirement Plan
It used to be so simple for those approaching retirement. Start trimming the portion of your retirement portfolio dedicated to equities and move into laddered, safe fixed-income. Just 10 years ago you could get a 6% yield on a 10 year U.S. Treasury bond. Now you don’t even get 2%. With yields rising around the world on government debt, the risk/reward tradeoff for long-term fixed income is weighted way too heavily on the risk side these days.
Two of the Best Dividend Payers Today
With short-term interest rates still sitting at near 0%, more and more investors have begun to seek out companies paying a reasonable dividend yield. But as many have pointed out, including myself, it’s not just about the yield. The consistency and growth rate of the dividend are of utmost importance as well. With that in mind, let’s take a look at two solid companies with low debt, dividend yields above 4%, and a strong five year dividend growth rate above 8%.
The Euro Experiment is Failing
The continued volatility in European bond markets is not surprising. Many of us predicted that the euro was doomed as soon as members of the euro zone pushed their public debt above 100% of GDP. Now their behavior is coming home to roost as markets are sending bond yields ever higher.
A Retirement Strategy for Many of Us
There are so many strategies for investors that are tossed around these days that it’s easy to forget one of the most important ideas: Those who are younger should be taking more risk in their retirement portfolios than those who are approaching retirement. There are a few reasons for this. First, those of us who won’t retire for another 25 years simple won’t need the money in our retirement accounts any time soon. So the day to day gyrations in the markets have much less impact on our levels of stress and our decision making. Second, because younger folks are much less concerned about day to day movements in their retirement portfolios, they are much less likely to panic and move in and out of the market. And lastly, it has been proven again and again that given enough time, higher risk means higher returns. The key phrase here is “given enough time”.
Dividend Yield vs. Dividend Growth: Verizon & Walmart
It is not always easy to turn down the enticing dividend yield of a company that is paying a yield of 5% while instead opting for a yield of below 3% in the hopes that eventually your returns and yield on cost will at least break even. It’s also not obvious how long it might take for the lower yielding stock to catch up with the higher dividend yielding stock. To help answer this question I looked at two companies that offer these different alternatives: Verizon (VZ) and Wal-Mart (WMT).
Avoid These Pitfalls When Planning Your Retirement
It is never too early to start thinking about how you might prepare for your retirement years. Unfortunately, many people don’t really sit down and go through any sort of analysis until they’re in their 50s or even later. For those who would like to plan ahead, there are multiple ways to help set yourself up for a secure retirement later. There are also traps that many fall into: Here are three of them to avoid.
Handling the What-Ifs When Retirement Planning
Why does it seem like planning for retirement has become so much more difficult in the past five years? So many folks approaching retirement are scrambling to figure out how much money will be there when they retire, whether or not they actually can retire before they’re 65, and if they’ll run out of money before they leave this earth.
Replacing the Percent Retirement Rule With a Dollar Based Rule
It has been a question for as long as people have thought about retirement: How much can one withdraw from his or her portfolio each year without running out of money in retirement?
Avoiding Companies That Might Cut Their Dividend
With short-term interest rates near 0%, it is enticing to buy high yielding dividend stocks and just sit back and watch the dividend checks roll in. But it is very important that investors understand that when times get tough, companies that can’t afford their dividend any more will cut it; and some will slash their dividends immensely.
Can You Count on Social Security When You Retire?
According to the Social Security and Medicare Boards of Trustees, the Social Security fund will be exhausted in 2036. Because there will still be money coming into the fund via payroll taxes and interest from treasury bonds, this doesn’t mean that all Social Security payments will be stopped in 2036. But it does mean that benefits would have to be cut to keep the fund solvent. Given current forecasts, Social Security payments would have to be cut by 25% across the board in 2036 in order to keep the fund from going bankrupt.