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Author: dmmcbelk Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 294  
Subject: changing portfolio into Retirement income Date: 12/12/2012 12:18 PM
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So I've been in Fooldom for 10 years and have amassed a vast array of stock knowledge. I am grateful. Now I have a well diversified portfolio of stocks in various retirement vehicles. My question is when i near retirement, (still 25 years away), how will I convert these portfolios into retirement income?

I appreciate the responses.
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Author: gdett2 Big red star, 1000 posts Old School Fool Ticker Guide Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 286 of 294
Subject: Re: changing portfolio into Retirement income Date: 12/13/2012 1:50 AM
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dmmcbelk,

There is a number of things you can do now and in retirement. Here are some questions to ask yourself and maybe you can formulate the answers based on what you see.

First: What sort of income does it provide now? Does it produce any interest or dividends? How steady are the dividends? Are they reinvested automatically or manually?

Second: How comfortable are you with carefully selecting partial positions to sell?

Income from a portfolio comes from 2 basic methods.

1. Sell partial positions from appreciated investments. This method consumes the asset.

2. Have a dividend/interest paying portfolio that pays you without consuming the principal.

I am retired. My portfolio pays enough dividends to cover about 68% of our expenses. Interest brings that to about 90%. (Side note: Because of all the early/special dividends this year I am at 102%, which means next year will be less) The 90% leaves 10% for SSA and pension to cover.

With 25 years to go, you have time to start slowly building a stable dividend paying portfolio. A company like KO is a good place to start. KO is a Div Champion on D. Fish's CCC list. KO has raised its dividend annually for 50 years.

Dividend payers need the normal fundamental inspection/monitoring with the intent of insuring the business is solid and the dividends will continue to be paid.

Gene

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