CHANGE MY LOCATION
Business
Examiners
Business Examiner
Most Recent Post
Woe is my 401(k) - retirement losses put at $2 trillion
Internet Business Examiner
Most Recent Post
Digression: YouTube video isn't a commercial but could be
California News
Multimedia News
Monthly dividends becoming popular among retirees
SEE THE LATEST ON THIS STORY
Related Topics: BALTIMORE
BALTIMORE (Map, News) - Investors want their money now — and many companies are working to do that.
A newly popular trend among the baby boomer generation that is on its way to retirement is stocks, bonds, mutual funds and CDs that pay out monthly dividends. While most publicly traded companies pay out quarterly dividends to shareholders, investments that issue a monthly return are developing a niche in the market.
And the desire for a check every month is an option many retirees go after.
“The easiest way is to find mutual funds that are in the niche of a municipal bond fund or an income-generating fund in high-grade corporate bonds,” said Thomas Taylor Jr., a certified public accountant and member of the National Association of Personal Financial Advisors. “What we have done is taken that a step further, and we have access to banks that are offering CDs that pay monthly dividends.”
A nine-month CD is good for about a 5 percent monthly dividend, Taylor told The Examiner. From this monthly profit, investors can take that dividend and elect to either reinvest it or make a small profit.
Some investments giving out the highest monthly dividends are Harvest Energy Trust (17.7 percent), Canetic Resources (16.7 percent), Pengrowth Energy Trust (16 percent) and PrimeWest Energy Trust (13.5 percent), according to Stockpickr.com.
However, it is always important to remember to diversify a portfolio, no matter what types of investments are being made.
“Up until now, many people stand around the water cooler and pick funds like it’s Monopoly money,” said J. Michael Martin, chief investment officer of Financial Advantage Inc. “All of a sudden, you wake up one day and it’s not Monopoly money. It’s serious.”
Just like any investment, there are certain things to look for when choosing the right stock, fund or CD. One detail to pay attention to is whether an investment will pay back part of a return with the dividend.
This means that it repays a fraction of the initial investment as part of the dividend to make investors think the monthly payout is high, while it is actually giving them back their own money.
dcarey@baltimoreexaminer.com
Comments from Examiner Readers
1:59 PM MST on Thu., Jul. 31, 2008 re: "City faces $2.9 billion gap in retiree health benefits"
Report as inappropriate
8:01 AM MST on Mon., Feb. 25, 2008
re: "Howard considering trust fund for retiree benefits obligation"
Report as inappropriate
7:11 AM MST on Sat., May. 26, 2007
re: "More than $10M set aside for retiree benefits"
Report as inappropriate
5:58 AM MST on Fri., Apr. 20, 2007
re: "More than $10M set aside for retiree benefits"
Report as inappropriate
Examiner Reader said:
Oh sure, raise my taxes. It doesn't matter that I have no retirement plan. That I have worked since I was 16 years old, not including babysitting when I was younger that 16. All the hardworking state employees, I say hard working because I see them napping in yellow trucks, deserve a big fat retirement check. And the city employees, with all the hard work they do by shopping using city credit cards is tiring. They deserve it also! Take my money, what little I have left.
0 agree | 1 disagree
Vote on this comment: I agree or I disagree
Not surprised said:
Retirement should be in 401K plans. With the county and the employee contributing. Then there would be no unfunded liability!
32 agree | 23 disagree
Vote on this comment: I agree or I disagree
Examiner Reader said:
Baltimore County's website makes no mention of a 5 % penalty , nor does it tell you how they aren't finish yet... if this information is true then employees who have been loyal and hard working are to be pusished for their committment. If the Administration and Council and Govenment on all levels really are so worried about the system , then perhaps they should show how much they care about all of their constituens out here in the communities it by reaching into thier own retirement systems/pockets and pay into the Social Security System. and Retirement system and cut their pays.. Excuse me, but it would seem that we have elected people who have no problem taking pensions from workers who are the backbone of the entire system....yet..pay nothing themselves... I think that perhaps it may be time that government "for the people" replaces "by the people" with "real people."
159 agree | 150 disagree
Vote on this comment: I agree or I disagree
Examiner Reader said:
Howard County's approach to funding their retirement liability is not being done by ravaging the current employee's retirement as Baltimore County Executive Jim Smith is trying to do. They also have a Spending Committee evaluating the financial impact. Baltimore County did not have the pension system evaluated prior to proposing the radical changes to the current retirement system.
172 agree | 151 disagree
Vote on this comment: I agree or I disagree