Why 4% Portfolio

The status quo for retirement investing is broken


Financial companies have trained investors to believe they need that company and its mutual funds in order to have a successful retirement. Investors believe that the big financial company has their best interests in mind, when in fact that company is more concerned with its own bottom line.

Although the 401(k) and mutual funds were created to benefit the investor, financial companies are the ones who have truly been rewarded. Financial advisers aren’t losing sleep over your future. Make no mistake about it – no one cares more about your future than you.

Why the 4% Retirement Portfolio is Better

The 4% Portfolio was designed to help individual investors take control of their retirement accounts. We provide a smarter, simpler and less stressful solution to retirement investing. Our model retirement portfolio is designed around the following ideals.

  • Earn at least 4% in income each year through dividend payments without having to reduce your portfolio balance.
  • Invest only in safe, established companies with strong financial histories.
  • Increase the investor’s income each year through dividend raises.
  • Reduce volatility within your portfolio.
  • Reduce or eliminate worries about price fluctuations.
  • Eliminate the reliance on price appreciation to fund your retirement.
  • Eliminate paying high fees to the big financial corporations.

Stop Worrying About Price Fluctuations

With the 4% Portfolio, retirees don’t have to fret about day-to-day price fluctuations of their investments. By carefully selecting companies with sustainable growing dividends and long histories of dividend payments, an increase or decrease in overall price becomes much less of a concern. If a stock’s price drops 20% but its dividend remains constant, that price drop has no affect on the dividend income being produced by the stock. A stock’s dividend is much easier to predict than its price and a dividend exists independent of the market price.

You Shouldn’t Have To Sell To Generate Income

The rich get richer

Everyone has heard the old adage “the rich get richer“. This is an obvious observation and there is a simple reason behind it. They are able to get “richer” because once they have amassed their fortune they can easily live off the income that fortune produces without touching the principal. This is the same philosophy people should follow when they retire. You should not be reducing your principal each year, you should be living off of what it produces. The 4% Portfolio shows you how to accomplish this.

Diversified Portfolio

Don’t put all your eggs in one basket

Diversification is key to reducing risk. The 4% Portfolio is made up of stocks across 8 sectors and nearly 20 industries. We do not limit the portfolio to stocks that are typically higher dividend payers such as utilities or Real Estate Investment Trusts (REITs). We choose a broad spectrum of companies in order to maximize the portfolio’s diversification and reduce its overall risk.

Inflation Protection

Just because you’re retired doesn’t mean you shouldn’t get a raise!

If you plan to withdraw the same amount from your retirement account annually then you will be losing purchasing power each year due to inflation. Inflation can be a serious threat to your retirement and you need an effective way to fight that threat. That’s why the 4% Portfolio focuses on choosing companies that not only have a history of paying a dividend, but also a history of increasing their dividend each year. These increases will help protect your portfolio from inflation each year and allow you to continue to enjoy the standard of living you come to expect.

Avoid High Mutual Fund Fees

Fees can, on average, reduce your 401(k) balance by up to 30%

Do you know how much you’re paying in fees? The average actively managed mutual fund carries an annual expense of 1.3%. That is 1.3% of your balance EVERY YEAR, regardless of how well or poor the fund’s performance. Are fees draining your retirement portfolio?

  • Are you aware that you are even paying these fees? An AARP study on 401(k) participants revealed that “71% reported that they did not think they pay any fees.”
  • Did you know that if you have $500,000 in your 401(k), you are likely paying at least $6,500 in fees each year.
  • And aside from a fund’s stated fee, your 401(k) likely has other hidden fees such as trading costs, investment management fees, administrative fees, and marketing fees all of which you are unlikely aware.

Continued Support

Investing for your retirement can be a scary and confusing process. We’re here to make it easier. If you need to rollover your current 401(k) to an IRA, we’re here to help and answer questions. Once you have invested by utilizing our Portfolio, we will keep you updated on those stocks each month. We will continue to analyze each company when they report earnings and, if necessary, recommend adjustments to the portfolio based off our analysis.

Let us help you take control of your retirement.

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