In this video, Ken Fisher addresses retirement investors’ common desire to generate income from their portfolios and why folks may approach this incorrectly. Many believe generating retirement income means they need to rely exclusively on things like stock dividends and bond coupon payments without touching their principal. But thinking this way could severely limit your investment options and jeopardize your long-term retirement goals.
Ken Fisher explains a better way to think of generating income in retirement is to focus on total return—price appreciation plus income—over time, and how much of that total return you’re prepared to spend. Then, Ken says, when you look at your portfolio and consider the total return concept, you can plan to minimize the components that could potentially result in higher income taxes. Strategically selling appreciated assets to generate cash flow can be a powerful strategy during retirement.
This process of strategically selling down some investments (your principal) to generate income is a practice Ken refers to as generating “homegrown dividends.” He believes this method can provide more investment flexibility and a potential tax benefit as well. Watch the video to learn more about this process and how Ken Fisher thinks about retirement income and cash flow differently than most in the industry.
If you would like to learn more about Fisher Investments’ thoughts on investing and the current market environment, visit us at https://www.fisherinvestments.com/en-us.
Investing in securities involves a risk of loss. Past performance is never a guarantee of future returns. Investing in foreign stock markets involves additional risks, such as the risk of currency fluctuations. The foregoing constitutes the general views of Fisher Investments and should not be regarded as personalized investment advice. Nothing herein is intended to be a recommendation. The opinions expressed are subject to change without notice.
