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Author: gtstarling Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19483  
Subject: Re: My semi-retired friend Date: 1/22/2000 7:20 PM
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Dear Ora,

You wrote,

My friend is 52 and she has had a $200,000 invested in three funds with Putnam for the last 6-7 years (no back load). The funds are mostly income generating Bond Funds.
She gets about $900 a month which she needs because she only works part time.

She is not going to touch the principal, but her 200,000 is worth less now... (she didn't think this would happen with Bond funds).

She doesn't have to worry about later retirement because she'll get a hefty inheritance (in 20 years or so??) .

I would like to help her get into a better plan.

Is there a better way for her to put the remaining principal into say, stocks only, which would allow her to generate that king of monthly $900 (or better)which would be sent to her in the mail?

I know she'd have to pay tax on money she takes out of the Funds if there is any profits.

And of course, she pays tax on her $900 or so monthly income.


You might check out Pixie's articles on Retirement Investing and his real-money portfolios with several different withdrawal strategies.

Even the uncertain 20-year horizon your friend has needs some growth to make up for inflation. (The bad thing about inheritances is that it is illegal to "time" them! :) heh, heh!)

This would at least give you some food for thought.

Gemstarman.
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