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Surviving The Marathon Of Retirement Savings

Apr. 08, 2021 8:35 AM ETAWP, PDI, PTY62 Comments


  • Retirement saving needs to be viewed as a marathon, not a sprint.
  • Don't lose focus of your goals and your needs.
  • Many will fail, you can succeed.
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Elite Start at the Pikes Peak Marathon and Ascent
Photo by SWKrullImaging/iStock Editorial via Getty Images

Co-produced with Treading Softly

Marathons are a pretty unique spectacle. It's not often you can convince so many people to trudge such a long distance. They do it for various reasons: Bragging rights, the cool shirt, personal confidence

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This article was written by

Rida Morwa profile picture

Rida Morwa is a former investment and commercial Banker, with over 35 years of experience. He has been advising individual and institutional clients on high-yield investment strategies since 1991.

Rida Morwa leads the investing group High Dividend Opportunities where he teams up with some of Seeking Alpha's top income investing analysts. The service focuses on sustainable income through a variety of high yield investments with a targeted safe +9% yield. Features include: model portfolio with buy/sell alerts, preferred and baby bond portfolios for more conservative investors, vibrant and active chat with access to the service’s leaders, dividend and portfolio trackers, and regular market updates. The service philosophy focuses on community, education, and the belief that nobody should invest alone. Lean More.

Analyst’s Disclosure: I am/we are long AWP, PCI, AND PTY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Treading Softly, Beyond Saving, PendragonY, and Preferred Stock Trader all are supporting contributors for High Dividend Opportunities. Any recommendation posted in this article is not indefinite. We closely monitor all of our positions. We issue Buy and Sell alerts on our recommendations, which are exclusive to our members.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (62)

ALLDAY1 profile picture
Well I am at the stage of my life both financially and age, and knowing that like everyone our time will end. I have 1 son who currently has a mortgage free home with 3 children and a 3 bedroom house and so rather than give the money to Uncle Joe with his forward plan of eliminating the in kind step-up basis of my estate should I die . I have initiated a plan to start the gifting program and while there is a 15k yearly gift limit one still does not pay a gift tax and is misleading as there is also a lifetime exemption of $11.58 million and if one exceeds the yearly limit still no tax is imposed until the higher number is achieved, however they keep a record. So my son is building a new home and I told him that when he sells his current house and applies it towards the mortgage of the new house that I would gift him the mortgage payment each month. This way he would still get the interest deduction on his taxes and move into a house where he is not so crowded. That Process started yesterday and in 6-7 months will move into his new house. When I pass he gets it all anyway including my house which is also paid for with a value of 400k. So what happens if Uncle Joe does not get his wishes passed, nothing but if I plan on the Just In Case happens I am covered.

PendragonY profile picture

Sounds like a prudent plan.
RIDA what do you think about the possibility that PDI, PCI etc will reduce distributions soon?
PendragonY profile picture

The last 5 distributions from PCI have had no ROC component and during 2020 only a small amount of the distribution was actual ROC. Over the last year NAV has increased 22%. And generated income has covered the full distribution in all but 2 of the last 12 months. The distribution looks safe to me.


PTY has had ROC in only 5 of the last 12 months and the lowest level of income is 10.5 cents of the 13 cent monthly distribution. NAV is up 26% in the last year. The distribution looks reasonably safe to me.

Rida Morwa profile picture
@drjoanv I believe it is unlikely. The NAV on these funds has been improving, which indicates that their total return has been greater than their distribution. They realized some losses, mostly on hedges, over the past year which negatively impact their UNII report, which reflects realized losses but not unrealized gains. PIMCO opted not to reduce the distribution when things were bad last year. So while they always could change their mind, I don't see it as necessary.

With a CEF, distributions are coming straight out of NAV, so if they do choose to reduce it in the future, then NAV grows faster. Choosing to keep it higher means that NAV grows slower. So the distribution policy usually comes down to what management views as creating the best total return, it isn't like the earnings disappear.
PendragonY profile picture
@Rida Morwa

I agree. Plus, when a lot of funds are cutting distributions your fund does pay as much of a penalty for cutting the distribution. But now a cut would stand out far more. So I see it as less likely.
Alternative Investing profile picture
Very important to understand ones needs/goals in both accumulation and retirement phases. Depending on ones other income sources (work, pension,SS, roth, tira, taxable accounts etc etc) only then can one put a pencil to filling their "personal" gap.

Could be income, could be growth or a blend of both!? And never forget income can also be generated from growth (not depended on, cause TR on ones $ is all that really counts)...just ask the folks who are sitting on shares of HD,LOW,MSFT,AAPL,AMZN, SCHD,VIG,VUG,QQQ.
Even in retirement one can still be in the accumulation phase (if they chose). >>And make sure you put the right holdings in the right type of accounts to minimize the taxman!<<
Rida Morwa profile picture
@learning to be patient with mr mkt I agree with you that it is very important to understand ones needs and goals in all phases of the retirement process.
Ickert profile picture
Thank you very much for the good investment ideas, they help me a lot to build up my dividend portfolio.
I will continue down this path, your articles are exciting and informative. Best regards from Germany.
Rida Morwa profile picture
@Ickert Thank you for your readership, I'm glad we can be of assistance.
whaleshrimp profile picture
My experience tells me this article outlines a big truth about retirement investing. At 71, I spend more time learning about investment products than ever before. After a life time of outdoor adventures around the world, I have turned this into an indoor adventure for old people, not a burden. Happy Trails
PendragonY profile picture

Sounds like you have a good plan in place to carry you forward.
ALLDAY1 profile picture
It is just one more adventure that is added to those you currently participate in. It just happens in many cases that it happens indoors. It of course is not "old people adventures" but can be enjoyed by everyone willing to participate. Now you can associate it to old people as the many who have retired now have free time to devote to it. Many people that you consider to be "OLD PEOPLE" have many choices and while some may work the financial difficulties of retirement, I suggest the you go to an assisted living facility or nursing home and you will fine very little investing going on and it is devoted to Eating, Sleeping, Watching TV ( especially game shows) and the occasional exercise routines provided by the facility they are living in I am 76, my wife has passed and I have a girl friend because if one stays cooped up all day doing little , their quality of life disappears and soon also their life.
I enjoy the investing environment and did not start until the late 40's, but I also spend time doing other activities. Investing as I view it keeps the mind active and makes one more alert to the many activities around us..

My view.

Rida Morwa profile picture
@whaleshrimp I'm glad you're enjoying your new adventure!
ALLDAY1 profile picture
Well I do no know so much about AWP as I do not own any .I have held Some of the Pimco funds for now going on 4-5 years and I am pleased that I do
Of course many will buy them for the possible specials that they throw off on a yearly basis usually in December but there have bee 2 years when the special amounted to ZERO.
Specials are a gift and one should not invest for the specials and there are some investors that will state that I own too much of the funds. Well maybe , but I seem to do OK with what I have and I have not received a dividend cut on any that I own and the pay monthly
I own 4 of them PTY 1350. PKO 3275, PDI a stock that I added 500 shares to in the last month now at 4164, and finally my largest overall holding PCI at 7671..
If a person invests they should invest for the monthly dividend and not the possible special that occurs in December. That being said I can only describe my success and make no recommendations. For me Good stocks to own.
But them I am only talking about my investments and not about yours.
I am still negative on Growth on PDI that suffered from covid, I am positive on PKO and PTY, Just barely but positive .

Wishing all great success.
wishing you all great success
Rida Morwa profile picture
@ALLDAY1 Thank you for sharing your thoughts. I am glad you are among the longs in PTY and PCI along side of myself. I have been treated well by the PIMCO funds I have held.
Rida Morwa is almost a daily fountain of wisdom. I would only add one additional consideration. I am in full agreement with Thomas Jefferson's comment that the earth always belongs in usufruct to the living. By this he meant that no one "owns" their wealth; they only hold their wealth in custody for the next generation. They have an obligation to transfer as good as they got.

Retirees who design a portfolio that will last only as long as they do are not violating this principal, but investors lucky enough to have a portfolio that will outlast them, do, I think, have an obligation to make their investment decisions with the longest possible investment horizon.
Rida Morwa profile picture
@2Reb That you for sharing that idea from Thomas Jefferson. I am a firm believer in creating a portfolio that generates "generational wealth" so that you not only benefit yourself, but also your family line. Its an older idea thats rapidly vanished from today's wealth discussions.
Longbottom profile picture
@2Reb I thought the same thing myself. But when I went to have an actual conversation with my daughter about turning over all my securities when I die, she wanted nothing to do with them. I'm not sure the next generation understands what we're trying to do for them.
Rida Morwa profile picture
@Longbottom That is an interesting situation, did she not want the time to manage them or did not want the income from them?
Life and investing are both marathons, truer words have never been spoken. You were not the most able athlete or the prettiest girl in high school? Well, I am later in life now and will run circles around most of those jocks now. And I would not trade my wife for that homecoming queen, she looks great!
Rida Morwa profile picture
@GreenguyMN Very nice! I'm sure your wife appreciates that! I agree many things in life the classic story of the rabbit and the tortoise applies so accurately!
Am considering replacing some (not all) of the proceeds of a bond maturing soon in the IRA with either PCI or PDO. Would welcome your thoughts on this, Mr. Morwa/Treading Softly.

Retired income investor
Rida Morwa profile picture
@usiah That would be acceptable so long as you understand the risk profile difference and also maintain allocation guidelines. I am a big believer that no matter how great something is on paper or from experience that my allocation guidelines still rule the day.
@Rida Morwa

Thank you. Any preference between PCI or PDO? Any other CEF you would prefer?
Rida Morwa profile picture
@usiah I prefer PCI and PTY out of all the PIMCO funds.
John R. Clark profile picture
I know a lady who was utterly unfit to join a marathon, so she lost 100+ lbs. and ran one to the finish at age 44. Now ten years later she puts in 5 to 7 miles several mornings a week, at least.

With investing, fitness, truth, beauty and all, it pays to read of worthy exemplars, not rotten ones. Notice how every piece on, say, facebook about thrift and saving draws complaints from people living "paycheck to paycheck" owing to trends dating back 40 or 50 years, our two- party system, and conditions etc. to which no one can possibly adapt, in their view.

That P2P stuff only means that people spend all they make. It tells nothing about anyone's work or money habits, although you could pretty well guess from their pay stubs plus bank and credit card statements. It's one thing to point out our society's flaws, but that soon turns into an excuse if it wasn't one already for not using the means you've got or trying any better. (I used to be a firsthand expert at this.) When you work at investing good and long enough, "Perseverance still is king/Time its sure reward will bring/Work and wait unwearying ..."

In retirement my wife and I are wealthier than ever. Later this month we're off on our first road trip since October 2019 through five other states. Once you have the means to travel often, it pays to have kept up friendships and family ties over decades past. One couple we're visiting are friends of 17 years from a casual meeting with no agency by family, neighborhood, work, church, or military service.

Thanks one and all for reading!
Rida Morwa profile picture
@John R. Clark Thank you for sharing your thoughts. That is a lot of devotion to run a marathon, but likewise we must be steadfast in our commitment to a great retirement.
Aren't you considered that the PIMCO CEF's might cut?
Rida Morwa profile picture
@drjoanv No I do not expect them to cut their distributions at this time.
Phil in OKC profile picture
Another aspect of retirement is "contentment." The Apostle Paul wrote to young Timothy that godliness with contentment is great gain. As I have aged, I find that in retirement my desire for earthly goods, which I used to think so essential to happiness, is no longer an emotion I feel. Instead I focus on how I have been blessed over my life, and fully realize a debt-free life, which includes a mortgage-free home that replaces "the BMW as the status symbol of choice." God knew what he was doing when he chose young couples to raise children rather than old. And he also removes the "keep up with the Joneses" desire in old age. Contentment is great gain and is true wealth and peace of mind.
Rida Morwa profile picture
@Phil in OKC Well said, finding contentment can be a lifelong journey for many, but once it is found, it should be guarded closely.
F Wilson profile picture
@Phil in OKC Amen, sir. Wise advice in your words. Patience, contentment, and gratitude are three tenets I live by.

Can't believe all the time and $ I wasted in my earlier years chasing "stuff".
@Phil in OKC Amen!!!
caasi notwen profile picture
I consider myself one of the lucky ones to have realized the advice in this article when I was still a young man. Friends of mine would laugh at my regular investments in companies they had never heard of but paying a growing dividend each year while they bragged about their Blackberry (Research in Motion) type investments. I'm retired; they aren't. Nuff said.
Rida Morwa profile picture
@caasi notwen I'm happy to hear you successfully retired. Yes many will crash into the reefs or shorelines instead of stay afloat on the way to retirement.
Buyandhold 2012 profile picture
The best way to survive retirement financially is to keep right on investing even after you retire.

My 100-year-old mother still invests in the stock market.

She gave me a list of 25 stocks that she likes now.

"It's important that I keep on investing," she told me. "That way I'll have enough money when I get old some day."
Rida Morwa profile picture
@Buyandhold 2012 Good for her! Sounds like you come from good stock, you and your schnauzer
McBifferton profile picture
@Buyandhold 2012
Good for your mother! By the way, besides her stock list we’d all be interested knowing what’s on her vitamin list.
How’s Phil liken the democrats now
Rida Morwa profile picture
@Fordinvester Why don't you ask him yourself?
Clarity_Fund profile picture
Genius! I have ~85 positions, avg starting yield of ~7%.
Rida Morwa profile picture
@Clarity_Fund Great! Without seeing your portfolio, I like the number of positions and yield.
Rida ; your articles are incredibly insightful and intelligent. Very much appreciated. IMHO you are in the same category as "Regarded Solutions" who was kind, smart as hell, and I learned tons from him over the years. He recently passed and I will miss him terribly. Like him, I think you have the same integrity. Thank you & keep up the good work.
Rida Morwa profile picture
@Carolanne1 Thank you for your kindness. I will miss Regarded Solutions as well.
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