"so I still have enough time for dividend growth/reinvestment to work well for me overall"
My sis is 58 1/2, and locked into taking $2850 a month from her IRA for another year. When I looked at the amount she had before the fall, she had enough to cover the withdrawals with income from safer dividend stocks.
Her advisor had about 9k coming in in dividends and interest. The rest in an array of growth, value and foreign funds, causing him to sell some at just the wrong time.
She told me that she was too old for compounding to have an effect. I asked her how much she wanted out of her IRA a year. From 59 1/2 until 62 1/2, $10,000 (three years towards college for her son ). After 62 1/2 maybe $20,000.
I told her she couldn't afford not to do it.
Here is how I laid it out for her:
Of $285,000 moved to Ameritrade, I set aside $20,000 toward her $34,200 she must withdraw in the next year.
Left at Ameriprise is a 16k CD ( 2% penalty if withdrawn before Feb. 2012. ) and five private reits worth 64k.
Cashing one reit this December worth 14k will cover the rest of her withdrawals until she is 59 1/2. That leaves four reits @ 50k + the CD, more than enough to cover until 63 1/2.
That way I have five years to get her a 20k return on the other $265,000.
So far I have invested $188,300 producing $11,630, 6.1% yield.
If I get 5% on the rest, 77k, another $3850, $15480 total.
Since I can reinvest it all for at least five years, another
$77,400. @4% average , $3096, $18576 total.
Dividend growth would have to make up the rest. I think it can be done. 2% dividend growth would do it.
Not using reits at all ( other than RNP ), since she has 18% of her overall total in the private reits, has made it tougher.
Going forward, as she sells them off I can add some upping the yield percentage. I am aiming low so as not to miss. :)
Here it is so far:
Symbol Qty Mkt Val Dividend Yield
CLX 200 13,686.00 3.2206
CPLP 1200 10,548.00 10.4408
ED 300 14,466.00 4.9347
GBDC 200 3,106.00 8.0311
MO 600 14,724.00 6.2423
ORI 300 4,104.00 5.0698
PAYX 200 5,456.00 4.5255
PEP 150 9,912.00 2.9304
PGF 300 5,538.00 7.0002
PNNT 300 3,252.00 9.4977
POR 400 8,188.00 5.0707
PPL 400 11,016.00 5.0578
PSEC 500 4,905.00 12.2741
RNP 600 8,184.00 8.83
SGU 1500 7,395.00 5.8233
SPH 300 16,683.00 6.0595
SYY 200 5,716.00 3.4965
TPZ 700 16,499.00 6.3559
UVE 1200 5,592.00 8.658
VGR 200 3,700.00 8.658
VVC 300 7,884.00 5.1613
WPC 300 8,937.00 6.7801
On my watch list for her: LLY, CTL, KO, COP, MCD, CINF, CVX, WM, BMY. Some combination.
Heck, while I am at it, here is what I have done with my brother in law. He wants to withdraw $500 a month starting in a year. Piece of cake, as dividends amount to $8026 now and he still has 25k in cash.
Symbol Qty Mkt Val Dividend Yield
CIM 500 2,040.00 17.866
ED 300 14,466.00 4.9347
EGAS 1200 13,356.00 4.8649
HGIC 200 6,618.00 4.3676
JNJ 200 12,658.00 3.4123
KMB 300 20,007.00 3.9801
LTC 400 10,476.00 5.961
MLPI 500 14,285.00 5.3889
MO 500 12,270.00 6.2423
MPW 1000 10,450.00 7.6409
NTLS 300 5,193.00 6.5003
PG 200 12,404.00 3.1014
PPL 300 8,262.00 5.0578
UHT 300 10,494.00 6.875
Shhhh... don't tell Dabum there is no O here. I'm waiting for a pullback. |
