Why The Average Investor Struggles
During Retirement
Here’s what the average investor is doing.
Say you have $250,000 saved up to retire on. Your Social Security check pitches in $1,341 per month.
You believe you only need $4,000 per month to live comfortably on. You may need more or less. New Retirement reports the average income is $48,000/year for retirees.
So, after Social Security, you need to only generate $2,500 per month to live on.
Leading up to retirement, you’d invested in big-name blue chips…Microsoft,, McDonald’s, Disney.
Over 20 years, you saw these stocks skyrocket.
If you look at the last 7 years since the crash in 2009, all three of these blue-chips have done remarkably well.
Starting in 2010, Microsoft stock is up around 171%…Disney’s gaining around a similar trajectory at just over 183%. McDonald’s has returned around 147%.
At these growth rates, you’d be netting around 20% per year in capital gains.
Sounds incredible, right?
Thus, in retirement, you want to be prudent and figure you might as well invest more in blue chips.
Except, we all know the market never goes up forever. At some point, it will crash. Stocks will plummet.
Look at Disney stock. In 2000, when the dotcom bubble burst, Disney shed over 66% the following 24 months. Or, in 2008, it lost 50.84% from August to April 2009.
Your portfolio got sliced in half.
If you then tried to still take out your $2,500 per month, you’d be broke in 4 years.
U will need savings either on deposit or in Gilts or u could
just own Investment Trust dividend shares and then u
don’t need to worry about the markets. In fact the one
strategy u can actually welcome falling prices because
as the price falls the yield rises.
Captain Hindsight.
Leading up to retirement, you’d invested in big-name blue chips…Microsoft,, McDonald’s, Disney.
Over 20 years, you saw these stocks skyrocket.
If you look at the last 7 years since the crash in 2009, all three of these blue-chips have done remarkably well.
Starting in 2010, Microsoft stock is up around 171%…Disney’s gaining around a similar trajectory at just over 183%. McDonald’s has returned around 147%.
At these growth rates, you’d be netting around 20% per year in capital gains.
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