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How to Ruin Your Retirement

Tom Hendrickson Mar 08, 2015


“Retirement is like a long vacation in Las Vegas. The goal is to enjoy it the fullest, but not so fully that you run out of money.”

- Jonathan Clements


In the March edition of the Dividend Advisor our editor-in-chief, Tom Reese (TR), kicks off a four part series on retirement pitfalls (which inverted are paths to enjoying your golden years). You’ll be intrigued by the data he’s compiled related to ‘why’ the de-facto age of retirement is 65 in most of the developed world, and I bet you’ll be surprised. Hint: ever heard of the Iron Chancellor? Yeah, me neither, until now.


CPI and Your Lifestyle


TR moves on from the history of retirement age to dissect how the Consumer Price Index marched “up and to the right” during the 20th century, and has since stayed on a similar trajectory into the 21st. The point he makes is just how important it is to think about your retirement income in terms of purchasing power, as opposed to nominal dollars, and how often people don’t work for the better part of their waking lives only to downgrade their lifestyle in retirement. Sure, you’ll have more time to clip coupons, but is that how you’d like to be spending it?


Action Items


Finally, TR concludes the first part of the four part series on retirement with three actionable ideas to think about as you set yourself up for not working (full-time). As they say, it’s what you do in the good times that dictates how you’ll live when things aren’t as good; or in this case, when you don’t have a full-time income to rely upon to plug any gaps in sub-optimal planning.


Oil & Interest Rates


Up next in this month’s Dividend Advisor, TR looks at how two of the biggest macro stories affected the broader market’s performance in the month of February. Of course, the decline in oil has reverberated around the markets (a topic we’ve covered in this letter) over the past six months, but as of the end of February ‘black gold’ seemingly put in a near, medium or long-term bottom gaining 2% for the month, marking the first monthly increase since June 2014. We’ll have to wait and see if the bottom holds and TR explores some scenarios for either case.

Next, on the strength of the recent headline economic data — specifically the jobs number — the narrative for a hawkish stance towards monetary policy is seemingly becoming a higher probability for Janet Yellen. TR examines this topic through the lens of a dividend oriented income investor.


Stock of the Month and More


The newsletter is rounded out with a staple feature each month, the: Dividend Stock of the Month. TR highlights a current Best Dividend Stock component and examines the main tenants of the bull case for the stock, headlined by a nearly 3.5% yield.

If you haven’t already, I highly encourage you to read the latest edition of the Dividend Advisor as TR does not disappoint this month with a jam packed offering.

Have a great weekend, talk to you Monday!

Be sure to follow us on Twitter @Dividenddotcom.

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