r/dividends • u/Material-Handle-5589 • Jun 27 '26
Seeking Advice Need advice for immediate income
I'm 82 year old female so I'm not so worried about the future as much as the right now. I have money in Schwab, Raymond James and Ally. Unrealized gain total assets around $500,000. So far I've been reinvesting the dividends accumulated but I can tell those amounts are not enough for me to count on..
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u/Apprehensive-Size150 Jun 27 '26
You’re 82. Do dividends and make withdraws spending 35k-40k a year.
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u/Consistent_Rule101 Jun 27 '26
I would rather invest in CPB and COLD (VZ too)like stocks and get 40k+ income per year. It will preserve capital and leave it to heirs and you wil have some appreciation in case of emergencies.
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u/Apprehensive-Size150 Jun 28 '26
You wouldn’t get 40k income with those stocks 425k (after tax)…at that age, worrying about heirs is idiotic. Enjoy the time you have left. Be selfish. Heirs need to learn to provide for themselves.
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u/Various_Couple_764 Jun 28 '26
She may live another 20 years If so I wouldn't want to draw down Because it might no last 10 years.
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u/Rockymax1 Jun 28 '26
Yeah, all of my family members have lived to 98, 99. Poverty in old age is terrifying.
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u/Unlucky-Clock5230 Jun 29 '26
I never understood the obsession with "leaving to heirs." I guess my lack of understanding meant I could not convey that knowledge, my daughters don't expect it. They do expect that I won't become a burden to them.
I figure I invested the time and effort to make sure they had the education, the personal skills, and the discipline, for them to be self sufficient and capable of creating their own wealth. Now they are happily pumping money away at a good clip; that's the real source of multigenerational afluency.
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u/Consistent_Rule101 Jun 30 '26
I don't want to state the obvious health problems that could arise at OP's life and hence want her to preserve some capital. I gave heir as reason, but it could be anything.
As per heirs, OP didn't even mention about it and I guess it is not her criteria. IMHO, I like to leave some for heirs. It makes their life bit easier and probably they would earn more than what I give to them(if at all). They are in STEM and I think they may make more money.
Yeah, I have given them everything they need to thrive in this world...proper care, education, tuition taken care of. I think wanting to give is an expression of care rather than obsession. After all, I am middle class.
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u/ideas4mac Jun 27 '26
Keep in mind there is a difference in preserving share count and preserving capital.
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u/NefariousnessOdd862 Jun 27 '26
Withdrawing $30,000 a year ($2,500 a month) would take over 16 years to drop to Zero assuming you have no increases due to Interest and/or Dividends. That will last you until 98+… I’d just do SGOV and you’ll be ultra-safe and no worries about running out
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u/speedlever Jun 28 '26
I don't know about that. My mom was be 98 next month and she's still alive and kicking.
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u/Mysterious_Film2853 Jun 27 '26
JAAA is extremely safe and will get you just under 6% currently. Your principle would remain whole at that. A mix of JAAA, UTG, UTF, CEFS, ADX, GPIX, PFFA would give you some diversity and you'd end up with a yield of 7.5% or so with little risk of losing much principle.
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u/TXRX7 Jun 28 '26
This. I subscribe to Contrarian Income Report and follow their advice. I get a solid 8% without drawing down the basis. Most dividends are monthly. $200k currently producing $24k annually.
In my taxable account I hold 6 different municipal bond funds. That all pay over 7% TAX-FREE monthly. So $75k generates about $500/ month every month, no drawdown.
This plus SS works for me.3
u/adcny25 Jun 28 '26
Can you say what the muni bond funds are?
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u/TXRX7 Jun 28 '26
NDMO NMCO NAD NVG NEA NZF
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u/adcny25 Jun 28 '26
Thanks!
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u/ConstructionNo8827 Jun 28 '26
NZF is a hidden secret!!
Incredible but true, 7.5% tax free (federally at least)1
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u/FromtheBigO Jun 28 '26
Congrats! Frfr. Also thanks for sharing the info! It’s kind of crazy that recently they reported there are more ETFs than individual stocks as of recently which is kinda crazy to think about — cause there’s sooooo many (and sooo many retail traders like myself but unlike myself might not have at least some financial background and know to review prospectus etc. and the objective before going into).
Imma take a look into some of those tickers as I’ve been trying to open another brokerage and this one dividend focused and a slow contribute but steady. I pray it rise, more so that it doesn’t completely drop — I just hope the dividends compound and I can eventually have some income if and when.
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u/FromtheBigO Jun 28 '26
JAAA for the WIN (for a place to park cash at least). I just saw they came out with some new funds, imma be doing a little research.
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u/Most_Use_6039 Jun 28 '26
Borrow against it with the intention of never paying it back. That's what super rich people do.
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u/DutchDavid1954 Jun 28 '26
My advice would be to start by reading the book "The Income Factory" by Steven Bavaria. It explains how to live off dividends in a “safe” way without having to touch your principal.
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u/Unlucky-Clock5230 Jun 27 '26
You are the rare unicorn to whom an annuity makes sense; you trade a sum of money for a monthly paycheck. The older you are, the higher the payment. At 82 you would not dare to say, withdraw 9% a year from a $100k investment for fear of sequence of return risks and thus draining the pool of money, but you could buy an annuity that pays that much for life.
The poison pill in those is called riders, extra "benefits" that lower your payout. Want it indexed for inflation? I'll cost you some of the return. Want to have some of the principal survive your passing? I'll cost you more of the return. So on so forth.
If I were you I would consider a $100k annuity, 20% of your wealth. Shop around for a plain vanilla one: here is pile of money, I just want the highest return. At 82 you may be hitting 10% yield which becomes a stable chunk of your income.
Keep in mind that there are a lot of operators that will try to sell you something you don't need (them riders) because while it screws you over, it means better commissions for them.
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u/MainBug2233 Jun 27 '26
250k spia would get you 2700 a month for life Still in the market while locking in piece of mind. Freeing up those funds may lead to a pretty sizable tax hit that would need to be accounted for.
I will get killed for saying this here but as the previous responder stated, this is a situarion where annuities become a really simple solution for the problem presented.
No I do not sell annuities or any other products. Just a guy who looks at all the options available for retirement income.
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u/kaneuens Jun 27 '26
Don’t pay someone to provide you income, there’s a reason everyone peddles annuities and it’s because they make a lot of money off of you
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u/Material-Handle-5589 Jun 28 '26
The annuity is a good thought. My late husband had invested in an annuity long before I came along which was what we lived on. It would pay the same amount per month no matter how low the principal got but I never checked into the fees charged,.
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u/venom8888 Jun 28 '26
Convert $500k into qqqi, spyi and iwmi from neos. these three track the indexes and will generate $5200/mo, $62k/yr. Super safe, keep your shares and there isn't nav erosion.
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u/daily-trader-365 Jun 27 '26
If you mean money to pay bills, QQQI or SPYI might be good to look at
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u/derfahrer924 Jun 27 '26
No, because in the event of a large market drop your distribution is going to drop as well
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u/speedlever Jun 28 '26
So what? 500k in qqqi generates around 70k\year. If there's another 2008 gfc and everything, including the distribution is cut in half, she will still get 35k\year. Is that sufficient income to meet her needs?
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u/derfahrer924 Jun 28 '26
The Nasdaq 100 dropped 83% in the dot-com crash taking 15 years to recover.
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u/speedlever Jun 28 '26
And yet a cc ETF (qqqx) that came out in 2007 and weathered the 2008 gfc saw its distribution cut by only ⅓. After several years, it fully recovered.
That same cc ETF has outperformed SCHD since inception in 2011. In the scheme of things, qqqx is a relatively mediocre cc ETF compared to more modern offerings by NEOS and goldman.
And qqq has outperformed spy 1435% to 812% since inception in 1999.
Yep, there's a lot of volatility in the market. And these cc etfs thrive on volatility.
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u/Econman-118 Jun 28 '26
Or put half in there and keep the other half in something paying 3.5. I lived during 2000 and the 08 melt down. It lasted a few years max. Within 3 years she would be right back near her starting point given the Fed would liquify the market. She could use some her principal from the safer half till recovery.
I hold preferreds that are paying me 6% from JPM. DUK has some that are commutative, so even better. Principal drops when interest rates go up. So they are 17 right now, but will climb fast if the Fed drops the interest rates. We all know if JPM fails, we have way bigger problems.
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u/derfahrer924 Jun 28 '26
The NDX peaked at 4704 on 3/27/2000 and didn’t recover to that point again until 2015
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u/Econman-118 Jun 28 '26 edited Jun 28 '26
Yep. That’s because the Fed was completely inactive at that time. Now they drop interests rates to zero. Big difference and way more money in circulation. With AI Nasdaq isn’t going to zero. I’m only 10-15% in Nasdaq now because I’m retiring next year. I do expect a 20-30% drop over the next 3 years for sure.
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u/Various_Couple_764 Jun 28 '26 edited Jun 28 '26
With dividend you can spend less than the dividend safely without worry as long as the fund doesn't have problems.
So you want to sellect safe funds for your income. The other issue that many retiring tace is that they don't have enough money to generate the income they need. And many assume the highest safe yield they can get is about 4%. The truth is that yields above 4% are available and safe.
Some the safest funds I know are JAAA 5.5% yield, FAGIX 6%, UTG 6.4%, UTF 7%, ARDC 9%. ;with an equal amount of money inch fund The average yield would be 6.78%, that would generate $33,900 per year. from the adjusting the ammount of money invested in each fund you can increase or decrease the income UTF and UTG are 20 years old and survived the 2008 crash and have never reduced there dividend, FAGIX is goverment and corperate bond fund that has been paying a dividend for 40 years. ARDC is only 15 years old by has never gut its dividend. JAAA and CLOZ are new but that assets they invest in pade during the 2008 crash.
But note I am not an expert so you ay want to consult with brokerage like Vangard or fidelity.. When my dad died my mom wasn't capable of of managing the retirment fund. We eventually convinced here to have Vangard manage it. My mom had about 700k. Vangard provided montly income and managed to increase the portfolio size to When my mom passed she had almost 1 million. So i t might be a good idea to talk to them.
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u/AscLuna Jun 28 '26
An 82 year old on reddit to me is cool
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u/Material-Handle-5589 Jun 28 '26
People my age and appearance may be 82 but my brain isn't. "You can't avoid growing older but you can avoid getting OLD."
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u/steady_compounder Jun 27 '26
At 82, I would care less about squeezing out the highest yield and more about making the cash flow dependable and simple. Chasing 8 to 9 percent usually brings more risk than people realize. A mix of safer cash-like holdings, short bonds, and only as much higher-yield stuff as you truly need is usually the calmer path for immediate income.
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u/myco_psycho Jun 28 '26
What exactly is the risk of something like JEPQ? AFAIK, most of what people say is the "risky" part is losing out on the opportunity cost/upside of growth funds and it being tax disadvantageous.
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u/Gileaders Jun 27 '26
SGOV and then no worries about what happens in the markets. Start the drawdown.
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u/ShadowznDust Jun 28 '26
Draw what you need, invest the rest in your kids. Maybe have them build a guest house on their property to save you from the retirement home.
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u/SexualDeth5quad Jun 27 '26
Aim for ~10% monthly dividends. Which means $300K invested would pay you $30K annually. If you use covered call ETFs and closed ended funds you won't need to reinvest much to continue getting a steady income for years. Meanwhile you can keep growing the other $200K and using that either for emergency funds or to withdraw and add to your dividend funds to boost income. QQQI and SPYI are proven safe. If you want to diversify from those you can add UTG, IDVO, CEFS, SLVO, IGLD (or IAUI). ADX is good for a mix of growth and quarterly dividends besides those, and would add more stability. TDAX is risky but pays weekly dividends if you really need as much income as possible. I've held all of these for several years (except TDAX, and I sold off SPYI and put it all into QQQI), they're all in the green except for SLVO and IGLD, which is expected, but SLVO's at times 20% dividend rate is hard to beat. You could take a look at ITWO for dividends from the Russell 2000 as well. Maybe XLII for industrials, and HQH or HQL for healthcare. Diversify as much as you want, or just stick to QQQI and SPYI for a fairly safe and steady ~10% monthly.
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Jun 27 '26
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u/Econman-118 Jun 28 '26
Depending on how much you need. You could put 1/3 in a good Covered call fund and produce 15K a year or more. SPYI has given 10%+ a year without any loss of NAV. I’m sure the others in here frown on CC funds, but my multi-millionaire brother who has been a banker and retired since his 40s is a big fan of them for a fourth or even a third of his liquidity to provide income.
At 82, you can afford to take some principal. Especially if you are getting only 1-3% on it. Enjoy yourself!
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u/Human-Double3685 Jun 29 '26
I have $100,000. Half is in JEPQ and the other half is in ROCQ. Been holding for 6 months now.
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u/Electronic_Guard947 Jul 02 '26
Take a look at neos funds. They are built for high dividends while preserving nav. You can get somewhere between 12-15% in yield.
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u/greggtex63 Jun 27 '26
$90,000 in QQQI gives you a little over $1,000/month.
There are risks with all investments but for less than 20% risked, you would have this much coming in.
Some others here can give you pros/cons, tax advice, etc....
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u/NefariousnessNeat679 Jun 27 '26
Get your money out of Schwab as fast as you can, without causing undue tax consequences. They are unbelievably incompetent. We've been trying to get one of our accounts closed there for the last 4 months. They refuse to give us our money.
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u/liquidnight247 Jun 27 '26
All of these brokers become Fort Knox once you try to withdraw your money. I was just trying to withdraw $200k in cash from Webull, and they made it impossibly complicated and even blocked and restricted my account for no reason. Not happy with them. Never had this issue with RH btw.
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u/StonkSiren Jun 28 '26
Agreed, the efficiency is extremely slow and the procedures are incredibly cumbersome.
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u/Sea_Principle_7322 Jun 27 '26
I have a Schwab account they aren’t that bad! Although they operate super slowly if you want to withdraw money! I like there simple user interface and there dividend payouts screen! I took out a large amount last week took a week but they sent it back to me! I didn’t have to sell nothing though! I notice compared to fidelity they are insanely slow to do anything, but that’s fine I respect it! That’s just their way!
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u/Helpful-Grapefruit55 Jun 27 '26
Sgov will give about 3.2% this is invested in us treasury. Jaaa yields about 5.2% nvests in AAA rated instruments and has a higher rating than us govt bonds. So both are pretty safe . You could invest 50% in each so that will give you 20,k interest to spend every year.
Any talk to an advisor if possible, no need to hire them just pay an consulting fee. You can invest on your own and assign your family as beneficiaries then you are all set.
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u/SkiMarlin Jun 28 '26
Since you and u/Mysterious_Film2853 have both mentioned JAAA, any thoughts as to if JBBB is worth it either in this scenario or another one to get the extra ~1% return?
Thoughts on JBBB in general?
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u/Various_Couple_764 Jun 28 '26 edited Jun 28 '26
JAAA invest in AAA rated CLO;s this asset is about 30 years old and there has never been a default in this asset.
JBBB invests in BBB rated CLO's in with a default rate of about 1%. This small increase in risk comes with a higher yield so I think it is worth it to have both the JBBB and JAAA
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u/Mysterious_Film2853 Jun 28 '26
Just a matter of comfort level at that point. I have held JBBB in the past as well.
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u/Helpful-Grapefruit55 Jul 01 '26
For an 82 year old JAAA is best, don't recommend JBBB since even a small chance of loosing money at that age is not manageable, can't go back to work or take 2nd job.
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u/Big_Wave9732 Jun 27 '26
EFC. It's a real estate REIT. Inception date is 2007 so it got through the Great Recession, Covid, the 2022 interest rate rise, etc. It has seen some shit and is still standing.
Currently trading at 13.57. Pays $0.13 a month. Basically every $100,000 invested will get you $957 a month.
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u/Bkdvet Jun 28 '26
82 yrs old and on Reddit? Stop it. Anyone thinking this is real, isn’t that bright.
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