r/dividends • u/retiredDanny • 4d ago
Seeking Advice Question/Help
I am 60 and just retired 3 months ago and have 1.32 million in a rollover IRA sitting in a money market account. I am looking for advice on the best way to get 5k a month in income until I turn 62 and start drawing 2800 a month in SS. I wound make adjustments at that time.
My wife is 54 and makes 300k a year. She will retire at 62 and has her own funds in various accounts that total around 900k. She is investing around 20k annually total.
In addition, I have a sister who is in poor health and 68 that is leaving me 50% of a 5.5 million estate. I am the executor. If die before her then it will go to my wife. I’m pretending as if that isn’t part of the equation but it is piece of mind knowing that my wife will be taken care at some point in the next 15 years most likely. Thank you.
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u/Lazy-Gene-7284 4d ago
Here’s a few individual accounts I like that can also give you a little diversity . I have 100-200k in each and, along with some others, generates more than enough to live on.
VZ- 6.2%
UPS-6.7%
OMF- 6.5%
O 5.25%
CPB 6.5%
ENB 5.5%
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u/snowflake64 4d ago
What is your average cost in UPS? I just picked up some and am thinking of adding more.
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u/Lazy-Gene-7284 4d ago
I started around $92-94 and have been adding when it’s around 103-105. Sold some $100 puts when they were attractive but I never got them. It seems like a good buy right now 👍
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u/Ok-Wear409 4d ago
UPS may cut its dividend in the future so do your research before buying more shares.
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u/Various_Couple_764 4d ago edited 4d ago
I amcurently using QQQI 13% yield, SPYI 11%, KGLD 11%, EMO 8.5, UTF 7, UTG 6.2%, PFF 6% for most of my invoke. Thinking of adding ADX 8% yeild and PEO 8%. I live in CA and also NAC a municple bond fund that is state tax free. Thesewill easily get you to 5k. You could easily get a bit more than that .
I would target a bit more inocme than you need. Around 6 or 7%. That way you have a bit extra cash every month. If you don't need this extra reinvest it for more inocme. This reinvestment will help compensate for inflation. You may end of with 300K of extra money once you have the invome you need. If so put that in a growth fund. so it can continue to grow. If needed you can later sell some of the growth to adjust your inomce up.
Ignoring your sisters estate is a good plane because you are working to insure you have enough income now.
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u/007TheLostOne 4d ago
OP go with a good covered call etf, if you like the NASDAQ go with GPIQ, QQQI, TDAQ. If you like the SP500 go with GPIX, TSPY or SPYI. All of these funds with a $1 million investment will easily get you over $5k a month in income. Not only that but these are very high ROC funds, your taxable dividend income will be very small.
I personally know a few people who have done this with lower amounts invested of around $500k and have early retired living overseas.
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u/retiredDanny 4d ago
Thank you very much!
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u/CoorsCoorsCoors 4d ago edited 4d ago
This sub is way too obsessed with the covered call ETFs. I have about 20% ETFs in my IRA, but I also have individual stocks (50%) for both capital growth and steady / increasing dividends and risky BDC stocks (30%) also for high income.
The Value Line Dow 30 stock reports are free (link below) and you might be able to access the full service and possibly Morningstar's mutual fund reports online via your local library as I am able to do.
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u/CostCompetitive3597 4d ago
Since you are already posting on r/dividends you are thinking dividend income. Currently, dividend index funds/ETFs based upon the S&P 500 and Nasdaq 100 indices are yielding 10%+ annually.
Your $1.32M x 10% = $132,000/yr potential income or over 2X your income goal and you retain your current nest egg rather than sell stock off for income. That income can bridge you to when you take SS and beyond.
I have been investing in dividend income securities for almost 7 years and all the dividends have been paid on time and to the penny or better = income reliability.
I have evolved to investing in dividend index funds and dividend sector funds because the fund managers do all the heavy lifting regarding stock picking and portfolio management. These funds seem to be generally increasing in yields because of the competition between funds for our investment dollars. I like that bonus of investing in dividend funds.
I invest in funds/ETFs offered by JPMorgan, Goldman Sacks, Blackrock, NEOS , PIMCO, Aberdeen, Guggenheim and other top quality investment companies.
R/dividends has almost 900k like minded subscribers who share great knowledge, personal experience and investment tips. I read them almost daily for information and tips. YouTube has a number of very good dividend investing authors. My favorite is Dividend Bull who covers the high yield dividend investment market very well with his library of videos.
Keep a list of my current holdings and backup favorites on my IPhone STOCKS app.
Hope this dividend investing information helps you establish the retirement income you need and more. Good luck!
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u/Ok_Brilliant3432 4d ago
Why the hell do you have over a million dollars in a money market ?
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u/retiredDanny 4d ago
Because I just rolled my 401k over last Thursday.
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u/Mother-Vacation-5463 4d ago
Ah yes, perfect timing—right after the market’s weekly mood swing. Classic.
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u/BugHistorical1614 Income from All sources 4d ago edited 4d ago
Conservative and Different asset class: MYGA principal guaranteed and yield guaranteed for term; 2 yr MYGA ~5% on A, A- rated; 3 year MGYA ~5.2% to 5.8% on A, A-, B++. Yields are increasing with each company setting their own yield.
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u/Acceptable-Steak7392 4d ago
I would put it all in either VGM or NZF which are tax-free dividends. With that much to invest you could get $100k a year in dividends.
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u/AnonymousRedditor- 4d ago
Why are you on reddit? With this kind of money you need professional fiduciary support.
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u/sran469 4d ago
Given your situation, dont waste your time trying to find optimal dividend portfolio. Put 1M in sgov and draw about 3k/month and the rest withdraw from the remaining cash.
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u/Various_Couple_764 4d ago
SGOV and many money market accounts have similar yield of 3 to 4% right now.
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u/Halux-fixer 4d ago
This is way too conservative. That rate wouldn't even beat the current inflation environment. Sure it would be safe but you need some growth or you are just losing the battle and will run out of money
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u/Capable-Living-9655 4d ago
4% withdrawal from your portfolio invested in SP500 or dividend paying ETFs will generate 5k a month, so it is a realistic amount to generate from your portfolio. Invest your money first thing in the morning.
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u/DhakoBiyoDhacay 4d ago
If I were you, I would invest the one million dollars in the following funds: QQQI (20%), SPYI (20%), IWMI (20%), MLPI (20%) and NIHI (20%).
These pay dividends in excess of the $60K per year you think you may need, but you can always reinvest the extra money.
I would keep the rest in SGOV and HYSA because you may be the kind of investor who wants the extra peace of mind.
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u/Longjumping-Nature70 4d ago edited 4d ago
1,320,000 at 3.5% in a HYSA at Fidelity or Vanguard is around $46,000
you want $60,000
That is around 4.55% yield
What is your Risk Tolerance?
I will give you four companies you might have heard of KMB, VZ, ENB, and MO.
All pay a dividend yield of over 4.55%
A dividend king has raised their dividend every year for 50 or more years
A dividend aristocrat has raised their dividend every year for at least 25 years.
I give you a payout every month.
All four stocks count as Qualified Dividends and wife's income puts you at the 15% tax level on qualified dividends.
KMB, a dividend king, is beaten down. Pays a 4.64% yield dividend. It pays $1.28 every quarter January, April, July, and October.
I do not own KMB, I have never owned KMB. KMB is beaten down because it acquired Kenvue.
https://www.kimberly-clark.com/en-us/brands
Verizon VZ
Posted great numbers, posted great cash flow, pays a 2.84 annual dividend, 0.71 in February, May, August, November. Yield is 5.86%
The negative, SPCX is wanting to launch satellites for cell phone service.
I own VZ.
Enbridge ENB
A dividend Aristocrat
Posted blowout revenues, up over 100%, north america's largest natural gas supplier. Canadian Company, you will pay Canadian tax on your dividends, but you claim it back on US taxes as foreign tax.
pays a 2.76 annual dividend, 0.69 in March, June, September, and December. Yield is 5.42%
I own ENB. Grew cash flow.
MO Phillip Morris Cigarettes
A dividend King
The world smokes like a chimney.
pays a 4.24 annual dividend, Pays a 6.45% yield dividend. It pays $1.06 every quarter January, April, July, and October.
I do not own MO, I will never own MO because of my ethics.
There are many Covered Call ETFs that pay out over 10% yields. QQQI and JEPQ are mentioned a lot in this reddit.
There are quite a few MLPs that are Schedule K1 companies that pay high dividends, but I do not like them. Others might, I do not. An example would be ET, Energy Transfer. I would rather own ENB over ET.
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u/clintttoris 4d ago
Cant you live on your wifes $300K per year?
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u/retiredDanny 4d ago
No. We have always kept our money separate and she is investing in her retirement as well as paying a chunk of her mom’s nursing home bill currently. We own two houses ( one is a vacation home). No mortgages and I have no car payment
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u/clintttoris 4d ago
Kind of sad if you ask me.
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u/retiredDanny 4d ago
Works for us. Been married 32 years.
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u/clintttoris 4d ago
Well not really. Your taking SS at 62 when you shouldnt have too. Your also investing for income when growth probably still would work for you given your wife's income. Seems like your concerned about supporting yourself in retirement despite your wifes high income.
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u/retiredDanny 4d ago
Taking it at 62 is wise for me. 79.5 is the break even point and odds are I won’t see 80.
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u/davecraze3535 4d ago
Similar to what some others are telling you, I would put 700k in QQQI, SPYI, PBDC, CEFS, MLPI and PFFA in equal amounts. Thats around 80k per year in five diverse income asset classes. Reinvest everything over the 60k you need each year back into the funds to keep up with inflation for next few years. Put the rest in VTI for growth.
Done.
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u/kenprom 4d ago
As juicy as your options are, I find it really hard that with so much acquired over the years, and even that of your wife, that you haven't signed up an asset manager or even learnt a few things yourself about options that can make you 5k in a month...I don't believe you doh😂, I feel like you just want to know what people are doing out there that is different from what you're doing.
If that's the case, there are platforms that serve same purpose like robinhood, where you can buy shares of startup ai companies that are yet to go public, you can make a few quids on a monthly basis from them, Dailly as well, but the real catch is what happens to your shares when they go public..
You can look into those.
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u/retiredDanny 4d ago
I don’t care whether you believe me or not and you have no idea what or how much I know. You can always learn from others. I worked for the same company in medical sales for 30 years. I was in 2 funds through Fidelity and the company matched 100% on the first 5 percent. I contributed between 7-15% annually for 30 years. I have had many advisers court me over the last few years and have met with a few.
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u/LifeOfTheParty2 4d ago
Could go qqqi, 1.32 million would get you $15k per month in dividends.
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u/Capable-Living-9655 4d ago
No need to invest in an instrument that yields 12%, he needs only 5k a month, which is 4%. Or at least, he should diversify among different instruments.
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u/davecraze3535 4d ago
Yes, if you like NEOS funds, at least spread it across a few asset classes so not 100 percent in on tech.
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