Dan Celia

Financial Issues

May 2019 – Q: Our retirement money is all in an investment account with a large brokerage firm. We depend on it for $600 a month income. What should we do?

A: Ensure that your account is invested in a manner that protects your principal. Although your investment must be fairly conservative, you are not in a situation to avoid exposure to the markets. If 2 - 2 ½% interest would not equal the $600 you need, your aim is to have investments that produce as close as possible to the income you need so you will not have to sell investments every year or month to get that $600.

Your investment advisor must ensure that your account is invested to generate $7,200 every year that would be paid regardless of what the market is doing. If it goes down, it will come back up, while you continue to receive your income.

However, if you can manage with 2% - 2 ½% income on your investments and don’t want any risk, then simply develop a portfolio of CDs to generate the income you need.

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Dan Celia has been in financial management for more than 30 years. He works closely with AFA Foundation and can be heard six days a week on AFR Talk (afr.net).

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