Retirement Income From The SPY ETF – Investor Questions – July 4 2018

When it comes to retiring well, not everyone has a large retirement account to depend on. For many investors, they will continue to want to trade and invest to meet additional needs and finance everything from house maintenance and costs, to travel and recreation expenses to medical costs. We all want to retire as comfortably as possible. I recently received some questions from a long-time member, wondering about investing ideas designed to augment his retirement income.

Let’s review Gary’s questions and look at some answers. Part of his email has been shortened and personal details removed.

Investor Questions:

Hi Teddi,
Thank you for your excellent diary about your daily trading. I’ve been a subscriber for a good part of the period since you started the paid service and for several years before that. I’ve bought and enjoyed both your PDF’s.

I’m in my sixties now and I am to the point that I had better get on with retirement. I have a good knowledge of stocks, futures and options on both. I have a regular account at IB (Interactive Brokers) and occasionally trade mini-S&P futures or options. I’ve also dabbled in complex option strategies which I’ve made money with and then promptly lost it (too many moving parts.) The thing that sparked this letter is that I had some time and watched your SPY option trades. I really appreciate that you wrote down the exact times of the trades. I was able to match that to the indicators I use and just seeing the exact points you took action really gave me some insight into things I could do better. So, this is a long way to say thank you. But I actually have a question—I know I’m going to have to be able to generate some extra income after I retire and I’m hoping to apply your SPY day trading approach to my daily trading for retirement daily/weekly income. I think I saw once where you were advising somebody like me who doesn’t have a huge bankroll that you would probably concentrate on the Gambler covered call strategy (4 Investment Strategies For Ultra ETFs) for your investment strategy and Trading for Pennies with SPY like today to try to generate income or put some extra growth into the account. Would that be your opinion? Any other advice for someone like me that’s going to need to be a trader to supplement retirement income? Once again, thank you for all your writings.
Gary.

Some Answers

Introduction to Retirement Planning

When it comes to retiring, protecting available capital is especially important in the early years of retirement. As an individual ages beyond 80, retirement income can be augmented through also slowly drawing down amounts of the saved capital.

How to handle invested capital and what your outlook is for that capital’s use in retirement is always a personal approach. Some people have no dependencies and wish to leave no capital behind. Other wish to leave capital for a spouse or children. There are literally dozens of factors that come into the decision-making process which cannot be covered in an article such as this. Therefore let’s focus on retirement income through investing.

Retirement Income

As explained, everyone has personal needs. I am already in my retirement years and plan to leave the bulk of my estate to my children and grand-children. As I love investing I cannot imagine not continuing investing and trading. As I age I believe it helps for cognitive functions as well.

Use Only A Portion Of Retirement Funds

In Gary’s case I do not know his goals and objectives for retirement so my advice would be to set aside a small portion, perhaps no more than 20% of an available retirement portfolio for investing in risky assets.

Retirement Expenses: Daily Bills Versus Larger Expenses

For example if an investor had $150,000 to retire on and only government pension income, I would suggest using the government pension for paying day-to-day bills including food and then set aside a portion of the retirement income for investing. This capital can be focused on funding larger living expenses such as home repairs, auto purchase, medical emergencies, or traveling.

Retirement Investment Strategies To Augment Income

When it comes to retirement and augmenting income or pensions, no one should be chained to their trading platform. Instead a balance needs to be reached where an investor can enjoy a few trades but spend the majority of his retirement with many leisure type activities. In other words, retiring should be about enjoyment and finally having the time to do all the things dreamed about when we were fully employed. But for many people, there is just not enough income and so retirement becomes a burden rather than an enjoyment.

This strategy article looks at balancing retirement and available capital, with the use of stocks and/or ETFs to provide more income during retirement years. The focus must however remain on protection of available capital.

  This strategy article is lengthy at 2700 words in length and requires 7 pages if printed but it covers an important topic and as it looks at retirement strategies to augment income. It is for FullyInformed members.

Retirement Income From The SPY ETF – Investor Questions – July 4 2018

Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Please read the full disclaimer.