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Author: JLC Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76237  
Subject: Re: help -retirement investing plan Date: 6/4/2011 5:52 PM
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Food for thought in no particular order.....

--$72k/year SS and pension with $60k/year expenses. Sounds like you have money to burn. Not so fast Sparky. While the government is stating near zero inflation, as the common man who buys gas and groceries how much more expensive things have gotten over the past couple years. And with all the "free money" being printed by various governments, real inflation is likely to continue at a high rate. I would save this "extra" money.

--how safe is your pension? Is it guaranteed by a private company or some level of government? Can you get a lump sum payment? I would rather have the money in my own grubby little hands than somewhere else. The risk of default/restructuring may be small (or big - think GM or any other company that has filed bankruptcy that was once though "too big to fail") I would eliminate it if I could.

--I would have 3-5 years of living expenses (needs not wants) laddered in CDs.

--don't count your house as an investment. It is a place to live. If you get your money out of it when you sell it great. Look around, too many people bought more than they could afford because it was an "investment" and they were foreclosed.

--So you are now down to $700k to invest ($1400k - 400k house - 300k living expenses.

--I would pick 10-12 Dividend Champion or Divided Aristocrat stocks (Google the terms). These are companies that have decent dividend yields (many 5-6% range) and increase their payout every year. Some at a rate higher than inflation. This might sound too good to be true, and it can be. Some recent companies on these lists that fell off because they decreased and stopped their dividends: GM, GE, BAC. But they can provide a nice steady income stream that can increase each year.

JLC
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