How can you devise the best income strategy for retirement? It is a question one of our readers has raised, and a dilemma many investors face when planning for their later years.
Our reader wants to know what kind of real return he would need to target and how to take the income - even in volatile times. He says: "A common goal for many investors, including me, is to build a sufficiently large portfolio to achieve financial independence. The IC Portfolio Clinic frequently muses on the achievable real return required on a portfolio size of X to produce an income of Y.
"But how should you draw such an income once a portfolio is large enough? What strategies can be used to balance steady cash flow with multiyear market volatility? How should you balance income from sales of holdings against dividend income?"