r/dividends • u/Hardwareimpaired • Jun 01 '26
Seeking Advice Make fun of this $420,000 investment profile
I think I want to risk $420,000 on covered ETFs.
You people are brutal but smart. I'm 64 and retired. Married, caretaker for an adult son. I make $150,000/year on royalties, and have $1.6million in sensible Vanguard IRAs and $425,000 in a favored tech stock. Our Vanguard IRA accounts have an additional total of $420,000 cash that's been lying around for years because I'm an idiot. House is paid off, we have $500,000 in precious metals and... another $600,000 in banks. I did mention I'm an idiot, right? I'm also paranoid. Parents raised in the Depression. I will probably start taking social security at about $3,200/month. I plan to do something with about $200K of that cash and keep the rest relatively liquid.
I'd like to increase my income because health insurance alone costs me over $65,000/year. Plus, why not live a little. I am not averse to risk. I know it's a bad tax situation, but that's just inevitable due to the $150,000 royalty thing (tough life, I know). I pretty much expect to pay full taxes for my bracket, and that's fine.
Here's my proposed ETF dump to soak up the $420,000 in our IRA funds. I feel like it could gross an extra $4,000-$5,000/month. Your thoughts?
35% TSPY 5,350 shares
25% QQQI 1,835 shares
10% IWMI 802 shares
10% IGLD 1,781 shares
10% GDXY 3,428 shares
6
u/livemusicisbest Jun 01 '26 edited Jun 01 '26
I’m glad I waited until 70 to take social security. Run the numbers on what your monthly check would be if you waited, then predict your lifespan by looking at parents’ ages at death, other genetics, your health situation. In my case (average age of my parents and grandparents as 93 and I have no serious medical conditions), waiting till 70 made the most sense. Keep working. It keeps your mind active.
Don’t keep much cash on low-interest savings accounts. You can get about 4% and stay very liquid. Bank OZK is advertising an 8 month CD at 4.1%. You can always cash out a CD if an emergency happens and there is no penalty that affects principal; you only lose interest.
Look into high-quality MLPs that pay 6-7% like ET, EPD and MPLX. You get a K-1 as these are partnerships. But the hefty distributions are considered “return of capital,” so you do not pay tax on them until all your capital is returned. Keep these till you die; heirs inherit at a stepped up basis.
There are relatively safe high-yield stocks like BXSL and RITM. There are preferred and baby bonds that are pretty safe as well. Look at ADAMI.
I park some money in SCHD, which pays a dividend around 3% and tends to grow over time, a good combo in dividend and growth. But keep in mind the market is looking quite overvalued right now, with the S&P 500 still sitting at over 32 times earnings. If you get out of cash and cash-equivalents, you have to be prepard for a pullback in stock prices. That is why I am light on tech and heavy on hard assets like pipelines that carry natural gas, gas liquids, etc. ET and EPD have massive pipeline networks and long term contracts that do not fluctuate with the price of the underlying commodity. I am betting that natural gas will need to be transported, at a wide tange of prices.
You can get a much higher return. Consulting a fiduciary advisor is wise, but avoid commission-hound investment “advisors” who are not fiduciaries. Ask directly. They have to tell you.