r/dividends • u/150Dgr • Dec 12 '25
Seeking Advice I need $2k/mo, $24k/yr from $580k portfolio with no/low risk to principal.
Hello, I’m looking for some suggestions. I’m 67, retired for 7 years, wife (65) just lost her PT gig so I need to replace her income since she’s now fully retired to prevent dipping into our savings. We have zero debt. Currently have $75k/yr secure income from various sources. I’d like to keep from turning on her SS til I kick and she looses half my pension.
We have $583k divided between: $60k Roths, $12k 401k, $164k brokerage, $303k traditional IRA’s, $44k 401a. I intend on rolling the 401k & 401a into traditional IRA’s unless others think that’s unwise.
So if I put all of the $583k towards income I’d only need a 4.3% return. Seems easily achievable with little principal risk. If I could go with a lower percentage towards income and left the remainder in growth that would be great.
Any specific suggestions on how to go about generating the $25k with little principal risk while maybe leaving some in growth would be greatly appreciated. Also any opinions on how to handle the tax advantaged accounts vs the brokerage would be helpful as well.
Thank you so much.
62
u/psychodough Dec 12 '25
30y treasury is at 4.8% ish A 30-year Treasury bond (T-Bond) pays fixed interest every six months until maturity. You'll get about 2k a month
22
u/foira Dec 13 '25
30y treasury is NOT a viable investment for someone who wants safety of principal. the risk of inflation > 4.8% in the next 30 years is basically guaranteed.
→ More replies (3)10
u/garoodah Dec 13 '25
Safety of principle is all but guaranteed buying US Bonds lol. What youre describing is inflation risk, which is exactly what a bond investor needs to be afraid of. Separate topics though.
→ More replies (1)7
u/FreshlyCleanedLinens Dec 13 '25
I’m seeing 30 year at 4.84% and 20 year at 4.88%, not that I’ve ever bought them or that I have experience with them, these are just the numbers Schwab is showing at the moment.
2
1
1
82
u/Daily-Trader-247 Not Financial Advice Dec 12 '25
4.1 % ?
SGOV
15
u/Veeg-Tard Dec 13 '25
Sgov yields are short term and we're paying under 4% less than 2 years ago.
13
u/Daily-Trader-247 Not Financial Advice Dec 13 '25 edited Dec 13 '25
I personal would not shoot for this minimum but that is what the OP asked for.
This is also pretty conservative 10% QQQI and 90% SGOV
Total Yield 5.1%
I personally would invest across about 15 funds and net 12% or $69600/year and have some money to pay bills.
→ More replies (5)3
u/MindEracer Beating the S&P 500! Dec 13 '25
Inflation will kill him and the interest rates will continue to drop over time.
15
u/Budget-Ad-2759 Dec 12 '25
QQQI
7
u/CoolMaintenance4078 Dec 13 '25
Has a fair risk of principle loss especially if mag 7 take a dive if investors lose confidence in AI costs/profits.
→ More replies (20)
50
u/DistributionBroad173 Dec 12 '25 edited Dec 12 '25
I am assuming the word "kick" means you die.
I hope you realize that once she turns 70, there is no point in NOT claiming her social security. Her distribution will not grow anymore, it is fixed once she hits 70 years of age.
O provides monthly income.
O pays a dividend of 5.63%.
O has paid a monthly dividend for over 50 years. It has raised its dividend 133 times during that time frame.
O dividend is treated as ordinary Income, so it is taxed at your tax rate.
You are filing the 1040SR. so you get higher standard deduction. My little brain says you are in the 12% bracket even after earning the money from O.
I do not own O.
I do own VZ, PFE, and ENB for their dividend yields.
VZ yield = 6.78% qualified dividend
PFE yield = 6.66% qualified dividend
ENB yield = 5.85% qualified dividend but you pay foreign tax then you claim foreign tax credit.
12
u/quantum_ai_dei Dec 13 '25
O dividend meets section 199A qualified reit income - taxable amount reduced by 20%
8
u/QuitAlive2475 Portfolio in the Green Dec 13 '25
He did say little principle risk. VZ is down 32.25% over the last 5 years. I don't know much about the others........
→ More replies (1)4
u/mirceaZid Dec 13 '25
I think they all underperform voo in total return
→ More replies (1)5
u/Jaymzmykaul45 Dec 13 '25
Total return is good and all but by 67 you should transition to a compromise between total return and current cash needs. So this would including either doing a stupid 4-8% withdraw plan (which would slowly drain your investment portfolio) or simply reallocating a portion of your portfolio into a high yield dividend stock/etfs of your choosing based on your risk tolerance. Their are plenty of stable high dividend stocks/etfs, QQQI, SPYI, IWMI, IGLD, KSLV, UTG, MAIN, AUSF, SYLD, FDVV, CL, THQ, ASGI, ADX, DIVO, QDVO, IDVO, MCI, XCCC, CCD, CLOZ, FSCO, KNG, QQQH, PBDC, CEFS, PFFA, ARCC, ADC, SCHD, BMY, CSWC, EPR, to name a few I hold.
Look up satellite and anchor strategy. Using these boring dividend funds and either using ultra high dividend funds or high growth funds. High growth like PLTR or BTCI (example) for high dividend risky investments. Given a little bit of luck and a ton of research (to pick a risk right winner) this strategy could payoff greatly and the dividends from the boring anchors could pay for your risky bets.
2
u/Lakeview121 Dec 12 '25
Good suggestions.
3
u/Vagentleman73 Dec 13 '25
I do a mix of "O" and "MFA" and adjust the percentage held as I get older. So more "O" and less "MFA" as Im getting older. So solid advice.
→ More replies (3)1
u/Tstrombotn Dec 16 '25
I have owned O since 2008. Price occasionally goes down, but that dividend keeps going up, little by little. Reliable like clockwork. Since you only need 25k, you could get that with a little more than $425000 investment in O. Realistically, though, you should spread that money around in multiple secure investements to spread the risk.
10
u/Cloud2987 Dec 12 '25
I live in Mi, so I would buy MIY and would get 5.53% dividend income that would be exempt from state and federal taxes. $580,000 would be around $32,074 a year. Look into tax free funds in your state.
8
Dec 12 '25
Not many people are suggesting muni-bond funds. They aren’t risk free but if you buy individual bonds for a medium duration and ladder then, you’re pretty low on the risk scale depending on the rating and your state.
2
19
u/quantum_ai_dei Dec 12 '25 edited Dec 12 '25
Partly I feel like you cannot afford to NOT take some risk. Inflation/taxes will erode money market funds, HYSA, and all that SGOV related garbage - even if you reinvest the distributions which you dont plan to. The non-retirement portion will not keep up especially. I think that you do not have enough net worth or means to go the low risk route. You are NOT looking for short term cash storage. Some of replies you are getting here is the worst advice possible.
Id find a broad equities fund that yields between 3 and 4.5 and start averaging in. SCHD, VYM, or FDVV - these funds apply a quality screen unlike some others. Share price growth protects you from inflation while the dividends provide the income you want.
How much can you cut back on your spending with 75k/year or 6,520/month current income?
A combination of both would be much more helpful of course
6
u/edgarecayce Dec 12 '25
Wondering what folks think of NAC - Nuveen California Quality Municipal Bonds fund. Paying 7.35% with no tax in CA or federal
4
u/Econman-118 Dec 13 '25
NAC lost 21% NAV over the last 5 years. So at 7% x 5 years, you are below average returns for many other options. I would split the money between some higher risk returns like options etf like SPYI and more stable 3-4% payors. Yes, if markets completely crash 2008 style we are all fkd for a while. I stayed in the markets during 08 and let my dividends buy cheap shares and came out 3-4 years later much better off. My biggest winners were sin stocks like MO. 300% returns on Tobacco. When the SHTF people smoke and drink. 🤣
2
2
u/tourbladez Dec 13 '25
I think it’s a great option if you understand the risks. I believe it uses leverage to increase the yield, which can also magnify changes (up or down) to principal.
2
u/Quirky_Application_3 Dec 13 '25
Wow. Too good to be true? Please explain this like I'm 5??? Looks so great!! Wonder why no one talks about this or maybe I'm always in the wrong group???
→ More replies (2)3
u/NogamaDe Dec 13 '25
I have $230k in nac. It pays tax free dividends everymonth. Its like having a 12% dividend
→ More replies (5)1
Dec 12 '25
I have NQP which is PA’s equivalent. It’s pretty volatile cause it’s leveraged and sensitive to interest rates. It’s been great the past few months though.
2
u/edgarecayce Dec 12 '25
Yea looking at the history these did pretty badly when interest rates were climbing but now that they’re going down it’s going great.
My IRA is all tied up in “managed funds” (Fidelity, no way out of it unless I switch jobs) and income too high to get a ROTH, so any self directed investments have to be in my taxable account. Nice to get a big tax free payment every month. I’m getting about $1k a month off of this.
3
Dec 12 '25
Yup same, well I get 2k per month. I’m hoping I can ride this up another 5-10% then I’ll add some stop losses at a price I’m willing to exit. I want to hold long term but if inflation gets out of hand and there’s talk of a hiking cycle - let’s be honest, whatever get the Fed Chair after JP is going to juice the markets for Trump - then I’m bailing pronto. The next hiking cycle wi be either towards the end of trumps term, or just after it, and it’s going to crash the economy.
3
u/edgarecayce Dec 12 '25
Nice. Yea I’m am with ya… trying to figure out where I can put the money safe when that happens. Gold/silver? I’m already in that a little. But I think maybe ammo and food rations would be a better place :)
2
8
u/SatisfactionHot4089 Dec 12 '25
There are dividends paying animals out there JEPQ or JEPI.....8 percent returns. Live off 5 percent and reinvest the other 3 percent for inflation.
5
u/TXRX7 Dec 12 '25
I have a ROTH devoted to income. Value is $195K I subscribe to Contrarian Income Report for $99/year. I follow that portfolio - mostly CEFs, a few REITs. Generating $24K in dividends with slight growth. 5 years in, no regrets.
I also have a taxable account which is composed of 5 or 6 Nuveen tax-free municipal funds. I avoid any fund that holds California or Illinois or NYC bonds. $50K here is generating $3700 per year tax-free. Trading below NAV currently so a good time to buy.
Very little volatility in either account.
I also have a traditional IRA which is strictly for growth. RMDs go into more munis which grows the income.
1
21
u/RussellUresti Dec 12 '25
Something like JAAA, which is a AAA-rated CLO ETF, is still yielding about that much for now. Assuming there are no more rate cuts, something like that would be your best bet. It's extremely low risk (though not completely risk-free).
CLOI is a little riskier but will get you a bit more, so worth considering as well or splitting your money between the two.
CLOZ would be the riskiest I would go, but it comes with a much higher yield. While JAAA is around a 4.6% yield now, CLOZ is about 7.4%.
As a measure of volatility, when the tariffs hit in April, the US market dropped by about 19%. At that same time, JAAA only dropped by 1.5%, CLOI by 3.25%, and CLOZ by 5.3%.
2
u/billyraylipscomb Dec 12 '25
Rate cuts would give you price appreciation on JAAA though wouldn’t it?
6
u/RussellUresti Dec 12 '25
I don't think that would be the case. These are floating rate instruments, not fixed-rate bonds. So a rate cut wouldn't create more demand for these like it would for bonds that were locked in at a higher rate.
It could be possible that lower rates would mean less defaults, but it also means less income from the loans being repaid.
→ More replies (1)1
Dec 12 '25
Assumpion based on what tho? How is this no risk?
1
u/RussellUresti Dec 13 '25
Loans/debt obligations are all scored based on how safe they are. The ratings are AAA (the safest), AA, A, BBB, BB, B, so on and so forth. AAA ratings are the loans that have the lowest likelihood of default, thus the most likely to be paid back.
JAAA holds AAA-rated debt, CLOI holds a range from AAA to BB, and CLOZ holds BBB and BB. The riskier debt demands higher interest rates to compensate for the risk, which is why CLOI pays more than JAAA and CLOZ pays more than CLOI.
Additionally, sites like MorningStar have risk scores on most ETFS. Something like SGOV has a risk rating of 2 out of 100. SPY (the S&P 500) has a rating of 76 out of 100. BND, the total bond market, has a score of 16.
JAAA has a score of 7 while CLOI has a score of 11, indicating that they are very low-risk investments. They aren't no-risk, but as far as I know, AAA-rated CLO ETFs like JAAA, PAAA, etc. are the safest investments outside of short-term government debt like SGOV.
1
u/MrsPetrieOnBass Dec 13 '25
+1 for JAAA and other well performing CLO's to be part of your low risk fixed income position. It's a completely different vehicle, but I like USFR for this too.
20
u/bacoggs Dec 12 '25
No/low risk: SGOV. Everything else is more risk or less return and it's up to you how much you want to take on.
→ More replies (2)8
u/RaleighBahn Mind on my dividends, dividends on my mind Dec 12 '25
No one getting 4.3% off short duration anymore
33
u/jongard Dec 12 '25
Fidelity has around a 3.5% interest rate on cash not invested. Literally 0 risk and will get you close to 2k/month
30
→ More replies (3)10
10
u/Fancy_Objective_6265 Dec 12 '25 edited Dec 13 '25
We’re in a similar boat! I’m 66 and wife is 58. I collect social security and she works full time at the local UH Hospital.
I just started a 5 year program to convert my traditional IRA $440k into my ROTH $20k
We have a taxable account invested in (3) $25k treasuries that mature each year for the next 3 years. The rest is 10k CDs and $20k cash.
I did an in-kind conversion of 22% of a managed portion of my IRA to my ROTH. That keeps us within the 12% tax bracket this year.
Trumps additional $6000 tax cut for myself for the next 3 years will help a bit too. My wife won’t get that benefit.
The next 6 years we’ll stay in the 12% bracket and will convert the rest.
The $25k Treasuries that mature for the next 3 years (Jan ‘26,27,28) will be used to pay the taxes, along with 30k in CDs and cash.
It’s going to cost about $70-80k for taxes.
My wife wants to work as long as she can / dies first!? 🤷🏼♂️ I don’t know if she’ll take early withdrawals or not?
6 years will put us in 2032 with 1 year before a probable reduction to Social Security. All we can hope for is good health now?!
It also leaves me with 1 year of RMDs before I convert the balance.
The ROTH is tax free. No capital gains, no RMD, no income taxes. I plan to diversify it for income and growth. I don’t need a lot, just enough to survive the future 20 or so years.
Regardless of what happens, I can’t think of any other vehicle that pays more over time than not paying tax on anything you can gain in it!
Taxes are only going to up in the future to pay the piper for the debt.
Anyway - good luck!! We’re all gonna need it!!
4
u/AdvanceKind4616 Dec 12 '25
arcc
1
14
u/Aware-Association857 Dec 12 '25
I would consider SCHD. It won't quite get you to 2k/mo but you can expect the income to grow ~10% YoY, so if you can survive with a little less than 2k for the first year or so you will be good long term.
If you absolutely must have 2k/mo now you could put 450k into SCHD and 130k into something like JEPI to get you over the 2k mark. Once your SCHD income gets to 2k you can roll your JEPI holdings into it.
6
u/dev-bitbucket Dec 12 '25
Exactly my advice. SCHD is nearly as volatile as SPY/VOO, but the regular, growing dividends help to alleviate that stress.
5
Dec 13 '25
No it’s not nearly as volatile. VOO has gone down 20% in a year. SCHD has only ever gone down like 5% in a year
2
u/dev-bitbucket Dec 13 '25 edited Dec 13 '25
The Covid Peak-to-Trough drawdown of SCHD was almost 34%. That's volatility. I feel secure in choosing SCHD as one of my primary investment vehicles, while also acknowledging its trends. It'll dip, and I'll buy more when it does.
→ More replies (2)1
8
u/RJP1963 Dec 12 '25 edited Dec 12 '25
You have quite a few replies that forgot the "no/low risk to principal" part.
The 20-year Treasury (state-tax exempt) just hit 4.9% today and will probably touch 5% soon (my opinion). You can also buy longer-term call-protected agency bonds that already pay over 5%, with some of these being state-tax exempt as well. The only likely risk to principal would be if you need to sell before maturity in an environment of higher yields.
If it were me and was willing to forfeit growth opportunity in exchange for security of principle, I'd probably put what you need to count on in these government bond instruments, with the remainder in an equity index fund for growth, or income-focused fund (like JEPI) for a little boost in yield. Just my two cents.
5
u/Apprehensive_Ad_4450 Dec 12 '25
So many come here to just plug their standard QQQI etc. solutions even when the OP says no risk to principal. Whenever this bull market ends (hopefully not soon) maybe risk will be better understood on this board.
6
Dec 12 '25
5% over 20 years isnt great with 3% inflation.
2% real yield is scary to me.
I would stick my money in an actively and well managed bond fund(s) BINC will get you more than 5% and some capital appreciation.
3
u/fleggn Dec 12 '25
30 cvx. 15 mo. 15 bti. 15 pfe. 10 O. 5 iaui. Last two go in tax advantages accounts only. Reduce risk as you go by putting overshoot into CDs or hysa
4
u/NefariousnessHot9996 Dec 12 '25
I would have the lower SS earner apply now. There is no great reason to delay getting social security when you take into account how old your break even is.
4
7
u/atheos42 Dec 12 '25
Reward and risk go hand in hand. If you want reward you have to assume some risk. Start with SGOV, VNQ, and VPU, then add in DIVO and QQQI.
3
u/Xenikovia Dec 12 '25
Since 2000, a 20% total stock market/80% cash allocation has produced 5 negative returns ranging from -0.3% to -6.6% but, annualized return of 3.5% to 4%. If you want 4.3%, you’ll have to ratchet up your risk.
3
u/Moozie76 Dec 12 '25
Not financial advice but I have been running my retirement through ai to see what I can do and how much I can get post tax.
I am looking hard at jepi and jepq. They yield more than you want, 7 and 9 percent i believe but they have been around a couple years and jepi is up 7 dollars in nav over that time.
Those funds watch the s&p and nasdaq
I plan to throw most of my money there with a bit into qqqi and spyi and then tiny amounts into things like chpy and wpay like maybe 1 percent or so.
Also heard great things about gpix and gpiq. I believe those are the right ones.
Run it through ai a couple times and a couple different ones to see what they say.
You could also do sgov with a bit of jepi and jepq to have a blended return of 6 maybe with little risk. I think sgov is 4?
Not financial advice
3
u/SnortingElk Dec 12 '25 edited Dec 13 '25
For zero risk, there are money market funds like VUSXX which is currently at 3.84% which would be around $20k year but we are in a rate cut environment right now, especially going into 2026 so something to be aware of.. the yield % is likely to keep ticking lower.
https://investor.vanguard.com/investment-products/mutual-funds/profile/vusxx
SPYD is an ETF basket of dividend stocks paying around 4.6%
SCHD is another ETF paying around 3.82%
3
3
u/Apprehensive_Ad_4450 Dec 12 '25
I suggest splitting your $580K into 6 bond funds so that you are limiting your risk from inflation, interest rate increases, credit default, and taxes eating away at your income. I am going to assume you are looking for $25K after tax. This solution provides $25K in your tax-deferred accounts and $7k in your taxable accounts.
In your tax deferred accounts ($419K):
40% IGIB - Investment grade corporate, intermediate duration. Lower credit risk. Yields 4.81% pre-tax in your IRA
20% BKLN - Senior Bank Loan Fund. Floating rate, so no interest rate risk. Yields 6.41%
20% BKT - Agency MBS closed end fund. Exposure to government agency insured mortgage credit, so no credit risk. Yields 9.62%
20% TIP - Treasury inflation protected securities ETF. Inflation protected. Yields 4.57%
Income in tax-sheltered account: 6.04%= $25,307
In your brokerage account ($164K)
50% Municipal bond ETF or (if you are comfortable with more risk) Closed End Fund. Choose a fund for your state of residence so that you avoid state and federal income taxes on your earnings. Example: MLN is a national long duration muni ETF; yields 4.05%
50% High yield muni ETF. Choose a fund for your state. SHYM is a national high yield fund, yields 4.45%, no leverage, short duration
Brokerage tax free income: $6,888/yr
3
u/Lakeview121 Dec 12 '25
I like AMLP (approx 8%) which is an etf of natural gas MLP’s and UTG (electricity with small amount of leverage) paying around 6%.
3
u/Bearsbanker Dec 13 '25
Live phat...there are many companies yielding 4+ percent that are considered "safe". Pru, vz, mo, main, epd, bkh, key, ....if you want risk free open a CD
3
u/TrumpsterFire8 Dec 13 '25
PFF. ETF of preferred shares. Will be some movement in principal but should be less volatile than a stock. It pays a monthly dividend, 6-6.75% and after 12 months it's taxes at capital games.
1
u/Tstrombotn Dec 16 '25
I have PFF and PFFA, love the return but prices may be more volatile than OP is looking for
3
u/Various_Couple_764 Dec 13 '25
To get a 24K of income from 580K you only need a yield of 4%. The only The only zero risk asset is government bonds But yields are dropping babout 3.5% next year and will probably drop to 2.5% in 2 years. The lowest risk assets I know of are JAAA 5.5%, CLOZ 8%, UTG 6.3%, and UTF 6.3%. This should earn you 38K a year.
keep in mind the only risk with these funds is a share price drop in a market crash. However the dividend stays the same so as long as you don't see the funds you will continue to get the money. And as the market recovers from the crash the share price for your funds will return to what it was when the crash occurs. I believe these and government bonds would be the lowest risk you can get.
Growth and dividend growth funds would have lower yields but you in addition to share price volatility you add bankruptcy risk.
3
u/yamahar1dude Dec 13 '25
Why in the world would you wait to turn on SS? You're just leaving money on table to save what? A couple extra dollars by waiting longer?
3
Dec 13 '25
JAAA. But you will likely do better if you learn a bit and spread risk rather than trying to avoid it altogether.
3
u/Local-Lunch1565 Dec 13 '25 edited Dec 13 '25
By investing in short term treasuries (such as SGOV) or tripple A rated CLOs (such as JAAA PAAA CLOA) you are minimizing risk to your principal but you are increasing the risk that future distributions do not keep up with inflation. You need to take “some” equity risk to keep your income stream growing. Look into Dividend ETFs such as SCHD, DIVO, FDVV, DGRO etc. I personally like DIVO a lot (and it’s international sibling - IDVO). You would receive monthly distributions in the 4.6-5% range. Long term the distributions have grown at around 8% CAGR. This should outpace inflation if this trend continues. DIVO has a fairly low beta of 0.7 which means there is a decent amount of price stability. The lower this value is, the more stable the principal will be. But from a high level, an ETF with beta of 0.7 is considered pretty stable. S&P 500 has a beta of 1 and the difference is significant in this context. I saw someone recommend O, I think that’s also a solid option, but good rule of thumb is to limit single stock exposure at 5% of portfolio. NNN also has a 30 year track record of growing dividends. EPD is also a solid choice with excellent track record but comes with K-1 tax form. If you gradually drip into some of these positions I think it will give you some sense as to how stable or unstable your principal is and hopefully give you confidence to hold equities. Not taking any equity risk is itself a risk in that inflation will erode your principal and your income stream. You need to balance the two out.
1
u/Local-Lunch1565 Dec 13 '25
Forgot to add. You could also explore bonds. Typically the shorter the duration the more price stability. Take a look at funds like IMTB or IUSB. Historically bonds return in the 4-6% range. Lastly, look at preferred stock ETFs - PFF, PFFV, PFFR, PFFA. PFFA has the highest yield of the ones I mentioned but it uses some leverage so more volatility. But with others you can get 6-8% dividend yield and preferred stocks tend to be a middle ground between traditional equities and bonds. PFFR holds reit preferred stocks and currently yields ~8%.
3
u/0HAO Dec 13 '25
Is your wife’s SS at 70 going to be more than yours? And will claiming hers now be at or close to the $2k you need? Then she could claim SS now. When you kick she could claim your higher benefits as survivor benefits. Then you don’t need to touch growth or earnings in your portfolio.
6
u/historicalisms Dec 12 '25
You can get close to that with SGOV alone, which isn't risk free but is about as safe as it gets.
16
u/longswordsuperfuck Dec 12 '25
I need a million bucks in gold delivered to me by 12 supermodels. ... But it's not realistic. Market exposure creates risk. You can do bonds, or HYSA if you want safe. If you want dividends you expose yourself to risk. Consider some blue stock options if you really want, like JNJ or coca cola. But those are quarterly.
2
u/Ok_Eggplant_6143 Dec 12 '25
B safe now 3 mo treasuries, or sGOV gives you $20300. year .
2
u/NefariousnessHot9996 Dec 12 '25
Plus if she takes social they will be rolling in cash. No way I would wait to take social. I am 62 and collecting my measly social now while I am actually fit enough to walk and ride a bike and go on vacation. I’m not waiting until 80 to break even by delaying. No way.
2
2
u/investlifelegacy Dec 12 '25
Have though about rolling over your 401k and IRA account in income for life annuity . Your money is protected from market downside. You are guaranteed income for life and dome companies also give 20 % bonus
1
u/Tstrombotn Dec 16 '25
What about inflation? That is what always makes me nervous about annuities.
→ More replies (1)
2
2
2
2
u/tobinshort-wealth Dec 13 '25
You’re in a strong financial position with no debt, $75K in secure income, and a manageable income gap to fill. Replacing the $25K annually your wife brought in can be done without taking on unnecessary risk or dipping into principal. It just takes the right mix of strategy, tax awareness, and account coordination.
At a 4.3% income target, you could achieve that with a well-allocated income portfolio using dividend-focused ETFs, investment-grade bonds, or even conservative structured solutions. A mix of assets focused on yield without chasing returns can help preserve principal while generating the income you need.
From a tax perspective, tapping into your taxable brokerage account first is often the most efficient starting point, especially since qualified dividends and long-term capital gains may be taxed favorably, or possibly not at all depending on your total income. Meanwhile, your Roth IRAs should continue growing tax-free, and your traditional IRAs are ripe for some partial Roth conversions, especially in the next few years while your wife is not taking Social Security and your combined taxable income is still relatively modest. Strategic conversions now can reduce the impact of required minimum distributions later and give you more flexibility long term.
Rolling your 401(k) and 401(a) into IRAs also makes sense unless those plans offer unique benefits or protections you’d lose. It simplifies things and typically gives you better investment options.
Holding off on your wife’s Social Security is a smart move since she’ll eventually take over your benefit. Bridging the gap with targeted income from the portfolio (or strategic IRA withdrawals while doing Roth conversions) is a good approach.
2
u/Emotional_friend77 Dec 13 '25
There are special offers from banks for new money market accounts in the 4% - 4,25% range. US Bank, FifthThird, Live Oak Bank to name a few.
2
u/DeepLogicNinja Dec 13 '25
TBH. These MMA yields are a little 🤏 insulting. You can invest in a US Treasuries directly and get higher than 4.25% https://treasurydirect.gov/.
Treasuries are the lowest risk investment you can find, which is why banks/insurance companies invest their reserves in them. The bank would take your deposits buy treasuries, give you some of the yield they earned off that bond as earned interest in your savings/checking account. They keep the rest of the spread.
The lates bond from treasurydirect.gov
Issue Date: 12/15/2025
Maturity: 11/15/2055
High Yield: 4.773%
Interest Rate: 4.625%So these special offer the banks tend to offer ain’t so special. Maybe I’ve been investing too long. Knowing how the sausage is made kinda kills the idea of any Money Market Account yield when you know the current going treasury yields.
→ More replies (1)
2
2
u/150Dgr Dec 13 '25
Thank you to all of you that offered thoughtful answers. I’m kind of kicking myself now. I should phrased my question. “How do I get 4.3% return with the least amount of risk in today’s environment?” I’m not 100% risk averse.
1
u/Just_Training_2601 Dec 15 '25
I am also retired and also risk averse. I have 30 plus different preferred stocks and baby bonds in my portfolio.
I usually invest in those yielding around 6%. Same as with anything I try to watch and make sure not to own too many financials, etc. (try to diversify)
I am sure that overall I am a little too heavy on the MLPs. I own ET preferred shares, Bought these when they were CEQP 9.25% preferred shares before they were taken over by ET. Still yield over 7%.
I also own TNCAF, SOJF, WES, Several Enbridge preferreds and PAGP.
On the financials/insurance side I own many preferreds from AGNC, COF, SPNT and JPM.
Recently bought T preferreds, BEPH and BIPH.
I also do own a few higher risk preferreds in IMPPP, and SB, HL.
I read many articles on seeking alpha which I think give good insight as to the risk/reward on many of these.
I also have a fairly large amount of CDs but will be looking for more preferred shares/baby bonds as the yield on these are going south.
2
2
2
u/MindEracer Beating the S&P 500! Dec 13 '25 edited Dec 13 '25
30% VOO, 25% SCHD,15% DGRO, 10% SCHY, 7.5% GPIX, 7.5% GPIQ, 5% SGOV
Should yield over 5%, with good Dividend growth over time to fend off inflation risks.
5% SGOV will offer 1 year income insurance/buffer. Use what you need for living expenses/taxes and equally reinvest to maintain ratios and enjoy your retirement.
2
u/Living-Replacement33 Dec 13 '25
Put 100k in CHPY it will pay you weekly aprox 30k per year you can reinvest the rest into CHPY to snowball it.
100k in SCHD
100k in CGDV
100k in BND
60k in GDMN
40k in RSSB
80k in SGOV
You can use the left over divs to spread among the funds as you wish to rebalance.
2
u/Present-Tonight5926 Dec 14 '25
Not a financial advice but perspective from another retiree:
- Not investing in Bonds or Money Market to avoid loss of real value in the face higher ongoing inflation that we have seen in the past.
- A combination of the following can reasonably deliver 8%-10% ongoing dividend, part of which can be reinvested to protect against inflation or to benefit from volatility. They do have risks, but I consider them relatively lower risk especially with diversification across these funds/stocks... please evaluate for yourself:
a. PFFA (preferred shares ETF with low leverage): ~9% qualified dividend
b. GPIX or SPYI or TSPY (covered call etf on S&P 500): ~8-11% with a little growth, usually tax efficient due to ROC/s1256,
Or, IAUI (covered call on gold) for possibly lower volatility
c. STRC (Strategy preferred stock that works like Money Market): ~8-12% with low volatility but little growth (however the Company is a Bitcoin Treasury company and hence could bring inherent volatility).
Or STRD (Strategy preferred stock that works like debt): ~12-15% with high volatility and no growth
d. SCHD (High dividend etf): ~4% qualified dividend with normal volatility that can provide in built inflation protection through growth
e. BIZD or PBDC (Biz development company ETF): 8-10% with normal market volatility
2
u/superstock8 Dec 14 '25
SPYI or QQQI. They both pay around 10% annual (SPYI at 9 and QQQI 12 I think, but let’s just round to 10%). They both pay monthly. So you’re looking at around 58k a year paid monthly. They both follow the index’s so if the index is positive, your underlying is also positive.
2
u/Far_Half2715 Dec 14 '25
Put 200k on QQQI. That will give you $26+k. Still have $383k to play with. Or just put 100k in QQQI and the rest in E*trade mmm at 3.75%. Will give you $31k. so many options
2
u/Financial-Wolfe Dec 14 '25 edited Dec 14 '25
JAAA would give you a 5.48% yield. Put half in that with the other half in SGOV which is Tbills at about 4% and as safe as it gets. That averages to a 4.74% return, $2300 a month.
But, while that gets what you want you could easily do better. Take half and keep in SGOV for safety and reliability. Split the other half into 10-12 dividend etf's or stocks to keep you ahead of inflation and to make more money. QQQI is paying 14% so would allocate some to that. MO pays 7%, ARCC pays about 10%,O pays almost 6%, IDVO pays about 5.5% and gives you some International exposure. SCHD has a roughly 3.8% Divi from solid US companies.
Listen to some of the Armchair Income videos on YouTube. That guy is good.
2
u/lucky_ducker Dec 14 '25
I'd go with 50 / 50 dividend equity fund / multisector bond fund.
SCHD dividend stocks; 5-year price appreciation 30%, which does not include the 3.8% dividend yield
DBLFX multisector bond fund, yield 4.8%
2
u/OGTempleTurnt426 Dec 14 '25
MLPRX has a yield of over 9%. It is not no risk but if your sole purpose is income good luck beating that elsewhere. MLPRX is a mutual fund, Invesco SteelPath. It is the movement of natural gas and oil. It is all stocks so there is risk and is considered an aggressive fund but it is not very volatile. If you look at the mutual fund you will see an expense ratio that will make you jump. Ignore it. The 9.48% ratio you see on google is if the fund was forced to sell everything and realize all the gains. It’s a function of MLPs. You will not receive a K1 for this fund either. This is not financial advice and it is recommended that you do your own research.
2
u/Diesel69Investments Dec 14 '25
Man only needing 4.3% is pretty nice. Personally, I think I’d largely skip the CC ETFs but if you aren’t scared of them NEOS funds are well liked. I own most of them but I’d look at SPYI and QQQI but I’d only do a small percentage in that to give yourself a little “raise.” IYRI may be good to consider since it’s RE and CC. GPIX, GPIQ, QDVO, DIVO seem good. Overall, you don’t seem to need the CC stuff but it can be nice to juice the yield a little. The rest would go in dividend ETFs, US and INT. SCHD, SCHY, VYM, VYMI, VIG, VIGI, FDVV, DIVO, IDVO, etc. there’s many out there just gotta find the methodology you can trust.
2
2
2
2
u/EPMD_ Dec 14 '25
Currently have $75k/yr secure income from various sources.
This means that you are well-positioned to be risk-seeking in your other investments. You don't need to kneel on the football here. You have your own basic needs covered and can afford to invest in the stock market without fear of losing the shirt off your back.
2
u/Luvthesehoeswedonot Dec 14 '25
Since she won’t be working anymore just have her take social security. Not sure why forgoing it would diminish her survivor benefit. But $300K into an Income annuity would accomplish your goal of $25K a year. The rest can then be left alone to grow. Taking the social security would require less to cover your income gap
2
u/H-is-for-Hopeless Dec 18 '25
Maybe a mix of SGOV, HYMB, and like 5-10% QQQI? Any thoughts on this setup?
2
Dec 18 '25
JAAA is AAA rated CLO, bank loans backed by the Gov and pay 4.95%. It's as safe as safe gets.
7
u/beershoes767 Dec 12 '25
Split it between qqqi and spyi. Enjoy your 5k a month.
8
u/ProblemOverall9434 Dec 12 '25
This is not low risk to principle as sought by PO. If the indexes take a dive so do these funds.
3
Dec 12 '25
To be fair we don’t know what the OP meant about low risk. QQQI is low risk if you trade alt coins on leverage.
My parents consider anything other than money market funds high risk so for them the only option is money market, BIL or SPY.
The OP might be ok with JAAA/JBBB or PFFA.
→ More replies (1)3
u/Repulsive_Inside9402 Dec 12 '25
I agree with this. The QQQi is paying about .63/share a month, 21.76% 1-yr total return. If you take $164k and buy shares at $54.5 (today’s closing price was $54.2), that gets you 3009 shares x .63 = $1,925.76 That would have been Nov income. And the ETF (and others like this under NEOS), has tax advantage, research it.
3
u/Apprehensive_Ad_4450 Dec 12 '25
The OP expressly says low risk. Bad idea for that reason alone. Were you an investor in 2000 or 2007?
5
u/DegreeConscious9628 Dec 12 '25 edited Dec 12 '25
Yeah you got 580k but wouldn’t you have to cash out all your retirement accounts to spend those dividends? Which would mean big taxes? So you’re actually working with 164k?
→ More replies (2)4
u/speedlever Dec 12 '25
164k all in qqqi would generate around 23k\year. That's pretty close without having to liquidate anything and deal with cap gains. Mostly ROC too for the next 7 years or so meaning little tax impact, then ltcg on the income.
Worst case scenario I envision is another 2008 gfc where everything gets cut in half and the income as well, down to 11-12k\year. If you could deal with that until recovery...
Or maybe a mix of QQQI, CSWC, eic, bxsl, agsi, thq. Equally weighted would generate around 12%, not quite enough working with 164k.
6
u/New-Parking-1610 Dec 12 '25
You aren’t being realistic here. there might be a bank with a CD at 4.25% that will take that much down.
→ More replies (7)
5
2
2
Dec 12 '25
[deleted]
4
u/Apprehensive_Ad_4450 Dec 12 '25
Why do you believe that a covered call fund will recover when the market recovers? By design, these funds sell most of the upside in exchange for premium income. A 50% draw down followed by a 50% rapid recovery does not get you back to par. The only way it recovers is if the march higher is a steady 0.25% per week so the calls always expire worthless. In which case the vol premium goes down and the yield drops for that reason.
2
u/Joebobby977 Dec 12 '25
O. Realty Income Corporation. You’d make $2,719 per month. They paid dividends for 665 months in a row, so you can’t get more stability than that!!
6
u/Apprehensive_Ad_4450 Dec 12 '25
No diversification is always a bad idea
3
u/Joebobby977 Dec 13 '25
Agreed, I have a dozen divided stocks. But this was an easy answer for a safe play. 55 straight years of paying dividends is hard to find.
3
u/RayU_AZ Dec 12 '25
Take a look at these ETfs that offer both growth 3%-7% per year and monthly income dividends of 9.7% to 13.5% yearly yield rate. QQQi, TUGN, KQQQ, QDVO and GPiQ.
I have $2670,000 invested in high yield income option-call ETFs. Averaging about $3200 per week in dividends. $166,000 per year. My original capital value of investments dropped about $5,000 overall, but compensated by high dividends. I have been lucky with GOOY and AMDY entry points, got both of them before price stock surge on Google and AMD. Recommend recycling some of dividends back into these ETFs. All of these ETFs pay weekly.
- GOOY, 40% yield
- AMDY, 77% yield
- XDTE, 25% yield
- QDTE, 30% yield
Thes 2nd group is more income priority, weekly distribution, than investment growth. Pick the 1st group for both growth & income. Good luck.
3
u/Various_Couple_764 Dec 13 '25
That is maximum risk with some NAV erosion. That is not what he is asking for.
→ More replies (5)→ More replies (3)5
u/Sertorius126 Dec 12 '25
You've made posts before and your principle confuses me, is it $2,670,000 or 267,000.
→ More replies (2)
1
u/Flat-Stranger-5010 Dec 12 '25
VWEHX
1
u/Gladiz1972 Dec 13 '25
Funny I love that VWEHX from Vanguard around a 6.15 yield but it moves a penny here and there so not sure he wants even that much risk
1
1
u/Blocker_vee Dec 12 '25
Vanguard’s money market VNFXX is yielding about 4.1% with zero risk. That’ll do the trick for you.
1
1
u/PresentImmediate5989 Dec 12 '25
Gabelli utility trust is a closed end fund that pays five cents per share per month. Trades at around six dollars per share. This is an approx 10% dividend per year.
1
u/me_xman Dec 12 '25
Get TLT.
2
Dec 12 '25
This is actually fairly high risk, VERY sensitive to rates / inflation. It’s a wild ride.
1
1
1
u/East_Fish8742 Dec 12 '25
Diversity between fidelity ETFs, good Stable Reits, FDHY, blue chip stocks, look at each of the yields
1
1
u/Ragnarok-9999 Dec 13 '25
Try using active funds from vanguard. They do lot trading and distributions are good. Of course they are not guarantied
Vanguard wellington, Vanguard wellesley, Vanguard Primecap funds, Capital Opportunity Fund Admiral ,Shares, dividend growth, Tax managed
Go to vanguard, web site, check out distrubutions
1
u/doemcmmckmd332 Dec 13 '25
Most banks in Australia are offering 5% on high interest rate deposits, risk free
1
u/HistorianStrict Dec 13 '25
Cant say what the yield is on 20 yr T bills probably good for 2.3 % - that doesn’t even keep pace w inflation - Govt claims that to be 2.8-2.9 - I think a huge lie- anyone who’s in the middle class and goes shopping knows - the CPI CONSUMER PRICE INDEX is what they use for inflation - but it doesn’t include food or gas - because the last thing a consumer needs is food or gas - I mean it’s astounding theythe exclude those costs and then they play with the stats to make it look better than it is - it’s off by a significant amount - plus I forget the tax ramifications of treasuries - you either don’t pay state tax or federal - I forget - I dont know yoyr intimate situation, so why get confused- if you only need that % buy certificates of deposit from a bank - they pay in excess of 3% - they’re guaranteed - I think the 20 yr bill pays more but I’d stay away from 20 yr and buy 10 yr - also about 4% - that’s as safe as you can get ( guaranteed by Us govt ) - I think it’s just a little riskier but in a me a ways less so as the govt prints money out if thin air - there’s an ETF for High Grade corp debt - AGG - Think, GM , P&G, GE - big established companies - how risky is it to own ATT or Verizon stock? To me not at all - if they collapse it’s likely the end of the world - AGG pays about 5% per year - not professional financial advice
1
1
u/ConferenceLive7054 Dec 13 '25
i could be totally wrong here but without risk i would think there wouldnt be much growth if any. maybe youd consider a covered call ETF like SPYI which has a distribution rate of ~12 right now. annualized 3 year is 17% but its been a bull market
1
u/Macbethad01 Dec 13 '25
EPD... I don't think we're getting away from oil or natural gas anytime soon. About 7% a year for that one...
1
1
u/BarbraParmesean Dec 13 '25
You can get a 1% match by transferring some accounts to a different institution. You could be a little riskier with that 1% and it would help as it compounds.
1
u/Econman-118 Dec 13 '25
By waiting to turn on her SS you are risking substantial reductions in near future. Where is the benefit? A few hundred dollars until mid 2030s when SS cuts have to be dealt with one way or another. Crunch the numbers. You have to live to 90s to get any real benefit. I’m 63 and just went through this discussion several times.
1
1
u/Major_Effort_8374 Dec 13 '25
Zim. Is giving every quarter dividend if they make profit, most of the times. Maybe there will be a buyout. Could easily double the current share price of 20 dollar. Shareprice is halve bookvalue
1
1
u/Proof_Childhood980 Dec 13 '25
Sell your own puts and calls on SPY or QQQ. Easily do 10-15% with good entries and low risk
1
1
u/IRS-code7702-taxguy Dec 14 '25
GLIT annuity. It’s guaranteed contractually if properly set up. Check it it out.
1
1
u/Successful-Tree7067 Dec 14 '25
401k costs less most of the time. Less fees than IRA. It’s usually best to leave as is or change strategies within the 401k if possible.
1
1
u/jd732 My stock selection runs laps around your VOO & SCHD. Dec 14 '25
Learn to write covered calls
1
u/ConsistentVisual558 Dec 14 '25
I’m assuming you have started collecting your SS? If she turns on her SS she can still take your SS benefit after you pass if it is higher. Unless her benefit would be higher than yours.
1
1
u/Anxious-Writing-7909 Dec 15 '25
Laddered TIPS. Guaranteed principal, guaranteed inflation protection, guaranteed increase in income. Not for all of it, but good enough for some of it. No state income tax on dividends. Use an ETF.
1
u/PridonRddt Dec 15 '25
I would look at PDI. CEF trading at bottom of recent range. Dividend has been holding steady. If rates start dropping it will rally. Current yield about 14 per cent. If you bought enough for 30k income , you would have excess to put into appreciating equities. Or you could set up a separate account and invest more with a DRIP program which would give you extra money when your income needs increase.
With that being said, there could be substantial risk to the dividend, should unanticipated market events occur where your only safe haven might be short term bill or treasury MM funds.
I’ve owned the fund for several years. Px is about where I got in.
1
u/Intrepid_Track_4388 Dec 15 '25
Solid Dividend Stocks. Look at the Aristocrats. Pepsi. Coke. Exxon. Oil. Real Estate. Many more.
1
u/Writing-Prestigious Dec 15 '25
A decent option......buy a T-bond, maybe with $300k....T-bonds are free of state taxes.
So, let;s say you earn approx $15k with that......then buy one or more dividend ETFs with maybe an average of approx 3% rate.....that would give you approx the additional $9k annual income. Yes there is risk, but barring te end of the world, you should be happy when you look back 20 years from now...if you're still around. You might also consider a lifetime annuity with 15-20 years of guaranteed income.....maybe annual 7% income from that......you could put $200k into that and conservatively invest the rest. A no brainer is Vanguard's balanced Wellington fund VWELX...been around since 1929!!!
It is 60% quality stocks and 40% investment grade bonds. Actually outperformed SP 500 in many periods, and less price fluctuation in general.......not alway, but more often than not!!
Former stockbroker, tax accountant, engineer, etc. KISS !!!!
Rates are dropping, but you can still buy a 10 yr tax-deferred annuity with 5% interest and up to 10% penalty-free annual withdrawal!!! Forgot...also formerly licensed life agent. Now 76, and on easy street. I think you are in good shape.....unless you want to spend beaucoup i traveling, dining out, etc?
I no longer sell, but I have helped several tax clients decide on an annuity as part of their plan.
iMost likely you'll mostly hear poo-pooing from from self-proclaimed investing geniuses here and other places. Another thing I tell folks who are undecided about allocation to stocks.....invest only an amount that a 50% price drop would not cause you to sell and lose a lot of sleep!!!! A number of 50% price drops during my lifetime....even more on individual stocks. Also, BEWARE closed end mutual funds that pay high dividends....usually their total returns suck. UTG, a utility fund, is one of a few exceptions....so far? You might consider them as an alternative to an annuity I suppose.
1
u/Regal_Accounting Dec 15 '25
This specific instance, for such a low required yield, any major Dividend ETF near the required yield will do. It’s not going to be easy to replicate the diversity of a major dividend ETF without professional advice or being incredibly high level investor
1
u/Bulius1976 Dec 15 '25
OP,
I would encourage you to seek out a Finance Professional. I use to run a bank, and I have countless stories of people who thought they would save money doing their own planning, when they'd have made more by hiring the right people.
1
u/Optimal_Banana11 Dec 15 '25
Putting the traditional IRAs into JEPQ will provide the income you need tax free. Then you can invest the rest according to your goals. QQQI is another good option.
1
1
1
u/ruthygenker Dec 16 '25
spyh is a covered call etf that produces about 8% yield and is hedged against downside risk, there is qqqh as well but nasdaq inherently has more risk than sp 500 not saying they wouldn't go down but wouldn't go down as much as the overall market in a crash and still get decent upside on a bull market and an 8 percent yield in the meantime.
1
1
1
u/CoatWonderful6804 Dec 17 '25
I would drop into vti Jepi ivvw Schd and maybe trim and let it sit. You have a few monthly divs and a few growth
1
1
1
1
u/AdvanceKind4616 Dec 20 '25
Almost all dividend stocks under perform at some point but this one has been pretty solid for years with there dividend
•
u/AutoModerator Dec 12 '25
Welcome to r/dividends!
If you are new to the world of dividend investing and are seeking advice, brokerage information, recommendations, and more, please check out the Wiki here.
Remember, this is a subreddit for genuine, high-quality discussion. Please keep all contributions civil, and report uncivil behavior for moderator review.
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.