No. of Recommendations: 2
As I read more and more of this board, I see the contemplations and consternations of those people who are getting close to early retirement. The question that I perceive is: What will I live on (naturally)?

If you convert your investment funds from growth to income, the next question is: What kind of income vehicles are there? The gamut of such vehicles run from the mundane (CD's) to bonds to stocks.

Financial planners, being the sheep that they are, recommend to shift your portfolio to bonds with some stocks for growth. I believe that a person can go into income stocks and, if you don't spend all of the income, the unused income is your "growth" factor.

You may ask, what kind of stocks can offer that degree of income? My suggestion: REIT's, which are
real estate investment trusts. Depending upon the sector of REIT's which is chosen, you can garner a 7% to 14% dividend. The hotel REIT's offer the 14% yield.

If you like to play with numbers under a "what if" scenario, apply a 10 or 12% return to your portfolio (wether tax-deferred or not) and see what you could be living on.

Even if a fair amount of your retirement dollars are in a tax deferred vehicle, those can be rolled over to an IRA and annuitized. By annuitizing, you can avoid the 10% early withdrawal penalty if taking funds out before age 59.5. The withdrawals are still taxable income and the amount that you annuitize (take annually from your IRA) can be tailored to the amount you need to live on.

It is a fun "number-crunching" exercise that may show you are closer than you think! Works for me.
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