Building a High Yielding Retirement Portfolio – Part 1

It’s never too early to start planning for your retirement. Many of us who are just beginning our retirement need to plan on having enough cash flow to cover our living needs for the next 20 – 30 years. We will have Social Security and possibly a pension to help us along; however a substantial portion of our retirement income may need to come from the investments we’ve made over our lifetime.

One issue many face is how to generate retirement income from dividends. Today’s ultra-safe investments like Treasury Bonds pay a paltry 2-3%, Money Market accounts and CD’s are paying 1% or less. We might need investments that pay a lot more than this to be able to withdraw say 4% per year while still maintaining a substantial nest-egg for our loved ones.

Wise investors will have an allocation strategy in their portfolio that includes both high-yielding stocks and other investment to help cover any shortfall.

Here are some choices for investments and a sample range of yields:

  • Preferred Stocks – 4% to 10% Yields
  • Business Development Company (BDC) – 6% to 10% Yields
  • Real-estate Investment Trusts (REIT’s) – 5% to 13% Yields
  • Master Limited Partnerships (MLP) – 5% to 15% Yields

By allocating a portion of your portfolio to some of these ultra-high-yielding investments you’ll be able to improve your cash flow while waiting for the next Facebook or Apple investment to come along. In future posts we’ll discuss the pros and cons of these investments and some helpful tips.

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