Tuesday, September 10, 2013

5 Safe Dividend Stocks When Using The 4% Rule

The 4% Rule

The 4% rule is a general rule of thumb used by financial experts to determine how much individuals should be withdrawing from their retirement account each year. This is considered a safe and sustainable rate for a retiree with a long life expectancy.

In a high interest rate environment, generating 4% of income from your retirement nest egg could be achieved. With today’s low bond, Treasury Bill, CD, and money market rates, retirees have been forced to use other alternatives. These alternatives typically require investors to reduce their retirement savings each year. Or they rely on mutual fund investments to attempt to increase their portfolio and provide income and yet, they are not aware of the fees being accrued no matter the rate of success or failure of the mutual fund. Although the 401(k) and mutual funds were created to benefit the investor, financial companies are the ones who have truly been rewarded.

In the past decade retired investors have had to weather two economic recessions, a mortgage crisis, and a highly volatile stock market. Those planning for an upcoming retirement have likely heard the horror stories of retirement accounts getting wiped out during this time causing many retirees to re-enter the workforce in order to get by.  This has created a great deal of timid investors wary of risking their life savings in the stock market, but still searching for a way to generate a safe and reliable income stream. READ MORE

No comments:

Post a Comment