Market Volatility Not As Worrisome Anymore - For Now

Stock market volatility.  Bring it on.  I'm counting on regular retirement income to sustain us.

I didn't originally plan to do this.  My original plan was to live off gains from stock investment by taking profits on stock market gains and using the gains to cover our living expenses.  That resulted in some high anxiety years for me during the Great Recession and its recovery.  Our retirement accounts and invested taxable accounts were cut in half.   Ugh.  

Volatility was not our friend back then.  Luckily, the market recovered. I was fortunate that we did not need to withdraw retirement funds during this time.

However, I started to learn the value of having some regular retirement income.  

I became an accidental real estate investor through inheritance after the Great Recession.   It was commercial rental property that had no mortgage and a long time tenant for 80% of the property.  The rental income was consistent and dependable, even during the COVID lockdowns and distributions were paid quarterly.  This helped mitigate some of the stock market volatility during the 10s.

During most of the 10s, interest rates were very low (0.20%) and savings accounts and CDs did not offer much income. In late 2021, I started investing in CDs since interest rates were rising above 1% to create more regular income.   I definitely invested too early, buying several CDs for 5 years that yielded only 1%.  Fortunately, I was able to get CDs in 22 and 23 that yielded 3,4 and even 5% for up to 5 years and some Treasury and Agency bonds that yielded 3.75 to 5.25% for 10-20 years.

Then, I started Social Security benefits early in 2022, before my full retirement age (FRA).  For that last three years, that has give us regular monthly income, that we can count on.   This was very helpful during the bear market of 2022.

In 2022, I started using a feature of our brokerage accounts to automatically distribute interest and dividend payments from our taxable accounts to our checking accounts on a monthly basis.   Around the 1st of each month,  we get a distribution to our checking account.   The amount varies since I haven't organized interest and dividend payments to be equivalent by month.

For the last year, I have been actively adjusting our taxable investments to create a sustainable retirement "paycheck."  Through dividend paying stocks, bonds, money markets and CDs,  I have developed a regular paycheck for the next five years.

However, there are still major risks that I can't control.  This strategy has not been tested though a significant market downturn nor a recession.  Interest rates may go to zero again.   Social Security payments may be reduced.  Also, then there are lurking financial and political crises.

We share see if this strategy is viable longer term.

For more on Strategy and Plans, check back every Monday for a new segment.

This is not financial, retirement, nor investment advice. Please consult a professional advisor.

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