Customer Review

5.0 out of 5 stars How to grow your income in retirement

Reviewed in the United States on May 26, 2024

In the back of my mind, I've always known that at some point in my financial life, I'd need to switch from buy-and-hold investing to investing for income. I think I've found the switch I need in "Retirement Money Secrets."

From my youngest days and throughout most of my life, I've heard and heeded the investment advice to buy and hold. Buy quality, diversified, low-cost, tax efficient investments like index mutual funds, no-load funds, and exchange traded funds. Be patient, be consistent, and let market averages and compounding work their magic. You'll need to endure market highs and lows, but in the end, you'll come out ahead.

That buy-and-hold advice is great—up to a point. For me and many others, that point comes when we need to convert our compounded buy-and-hold investments into something that generates reliable income for retirement.

Here's the problem. Those mutual funds usually pay dividends and interest equaling two percent a year. Guidance for living in retirement says to withdraw four percent of your investments per year. Selling shares to make up the difference between two and four percent can result in a slow, or not so slow, dwindling of your investments.

Instead, "Retirement Money Secrets" teaches you to focus on quality, diversified, low-cost investments like closed-end funds that pay you six percent or more every year. That way, you can take your four percent withdrawals, reinvest the remaining two or more percent, and grow your investments instead of dwindling them.

With this income-focused approach, you'll spend a bit more time managing your investments. You may not see the same growth in share values as with buy and hold. And you'll probably pay more in capital gains tax. On the other hand, you'll have a steady and growing income in retirement without worrying about the market highs and lows. The book includes real-life examples of how this approach works.

This may sound too good to be true. Author Steven Selengut has implemented this system for himself and hundreds of clients since 1979. That means this system has worked through Black Monday in 1987, the Great Bond Massacre in 1994, the bursting of the Tech Bubble in 2000, the Great Recession of 2008-9, and the Covid-19 recession.

Now that Selengut is retiring, he wants to share this income-investing approach with as many people as possible. Why? Because it's a shame for people to struggle in retirement when they don't have to.

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Full Confidence Ahead
Attaining Income Independence
Retirement Money Secrets