"Retirees should be just as comfortable selling shares to fund withdrawals as they are receiving dividends. From a total return perspective, there's no real difference."
"Mental accounting leads many retirees to view dividends as income, while selling shares feels like dipping into principal, despite the economic equivalence."
"Dividends are predictable and simplify cash flow planning, whereas selling shares requires active decision-making, contributing to discomfort around touching principal."
"Asset managers have rolled out a wide range of monthly income ETFs, with many offering distribution yields comfortably above the 4% rule before taxes and commissions."
Retirees often hesitate to sell shares for withdrawals due to mental accounting and the simplicity of dividends. Selling shares feels like dipping into principal, while dividends are perceived as income. Monthly dividends provide predictable cash flow, making financial planning easier. To address these concerns, asset managers have introduced monthly income ETFs, offering distribution yields above the 4% rule. Notable options include JPMorgan Equity Premium Income ETF and JPMorgan Nasdaq Equity Premium Income ETF, which aim for defensive portfolios while allowing some allocation to equity-linked notes.
Read at 24/7 Wall St.
Unable to calculate read time
Collection
[
|
...
]