12-21-2013, 01:53 PM
One thing that rarely gets discussed is the role of Social Security and pensions. In 2008, 20% of US workers were covered by defined benefit pensions - not a huge amount, but still a significant proportion.
David Van Knapp wrote an article about Bogle being in favor of conceptually capitalizing one's Social Security payment and favoring dividends here:
Bogle On Favoring Dividends And Capitalizing Social Security
For those who have not read it, there is a good and somewhat lengthy comment thread too.
I know we all have differences in how we approach retirement. Me and the iWife have defined benefit pensions. We also get SS, my first check will arrive in a couple of weeks and Kathy started getting her disability check this month (she is legally blind, which made it problematic to continue working as a graphic designer, but she held out as long as she could).
In addition, we have IRAs that have been added to via rollovers from 401k's and the defined contribution part of our hybrid retirement systems at the colleges where we worked in Oregon. I call it the many small pots of money and we probably won't starve retirement plan
.
As a result, income from our investments is not as important as it is for some folks and we may be able to continue reinvesting dividends until required minimum withdrawals hit me in 8 years.
The point is, though, from the article, that if you will receive Social Security or a defined benefit pension, that can be viewed as the fixed income portion of your retirement, allowing one to invest more of their IRA/401k/457 plan money into dividend paying equities.
We own no bonds or bond funds and, unless yields increase materially, do not plan to.
David Van Knapp wrote an article about Bogle being in favor of conceptually capitalizing one's Social Security payment and favoring dividends here:
Bogle On Favoring Dividends And Capitalizing Social Security
For those who have not read it, there is a good and somewhat lengthy comment thread too.
I know we all have differences in how we approach retirement. Me and the iWife have defined benefit pensions. We also get SS, my first check will arrive in a couple of weeks and Kathy started getting her disability check this month (she is legally blind, which made it problematic to continue working as a graphic designer, but she held out as long as she could).
In addition, we have IRAs that have been added to via rollovers from 401k's and the defined contribution part of our hybrid retirement systems at the colleges where we worked in Oregon. I call it the many small pots of money and we probably won't starve retirement plan
.As a result, income from our investments is not as important as it is for some folks and we may be able to continue reinvesting dividends until required minimum withdrawals hit me in 8 years.
The point is, though, from the article, that if you will receive Social Security or a defined benefit pension, that can be viewed as the fixed income portion of your retirement, allowing one to invest more of their IRA/401k/457 plan money into dividend paying equities.
We own no bonds or bond funds and, unless yields increase materially, do not plan to.