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Maximizing portfolio income

I am considering a career change - this would involve a lower salary for a bit. What are the best options for maximizing income from a portfolio? I have 350K in taxable investments, 310K in retirement. No debt other than a 100K mortgage; and a very low monthly burn rate. Given that I don't plan on touching the retirement funds for another ~25 years, I know I'm in decent shape there. I also plan on adding the maximum IRA contributions for my wife and myself, to further augment that bucket. To mitigate the salary cut, I was planning on putting a portion of the 350K in some form of income-producing investment. The base options I see are (a) tax-free bonds at ~4-5% (b) high-yield taxable bonds But I know there have to be others. Any opinions?

Thanks

Simon

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Reply to
simon_templar
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If you're taking a lower salary, you may be in a lower tax bracket, which means that tax-free investments aren't as advantageous. IIRC, high-yield (i.e., junk) bonds aren't paying a huge premium over better-quality bonds right now, so they're not as attractive as an investment either. You might look into decent-quality corporate bonds.

I also happen to like treasuries, but I live in a state (CA) with a high income tax, which makes the tax advantage significant. I happen to like intermediate term bonds now. There's too much uncertainty about interest rates for me to go long-term.

-Jim

Reply to
Jim Davidson

This question may be better answered at misc.invest.financial-plan.

Reply to
kastnna

I assume that there will be "some" earned income to support such contributions?

Your main goal should be to maximize your after-tax income. Tax exempt bond funds may not do that for you, unless your tax bracket is 25% or higher. Short or intermediate term bond funds (taxable) may be a better fit, since you are looking for a secure income stream with low risk. High yield taxable funds, while attractive, come with their own set of risks and returns are not that much better than intermediate term funds.

Moderator: misc.invest.financial-plan

Reply to
Herb Smith

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