HOW TO TRIPLE YOUR RETIREMENT SAVINGS EVERY SEVEN YEARS AND FAST-TRACK YOUR WORRY-FREE RETIREMENT

THE RETIREMENT CATCH UP PLAN:

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How to TRIPLE Your Nest Egg Every Seven Years and Fast-Track

Your Worry-Free Retirement By Charles Sizemore, Editor, Peak Income

TABLE OF CONTENTS What’s Your Number?.......................................................................................................2

Find Your Retirement Buddy………………….………………………………………………..7

How to Build a Rock-Solid, Conservative Portfolio Capable of 17% Annual Returns…....14

The Six-Figure Secret to The Million-Dollar Retirement Catch-Up…………….…………18

What We’ll Trade to Safely Grow Your Nest Egg to $1M: CEFs and More………….…..22

Legally Dodging the IRS……..…………………………………………………………….….28

Ready to Retire? Moving from Catch-Up to Sit Back and Relax……………………...….30

What to Know About Social Security……………….………………………………………..32

FAQs…………………………………………………………………………………………….34

Million-Dollar Retirement Catch-Up Model Portfolio…………………...…………………..37

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Section 1: What’s Your Number?

Take a look at this chart.

It shows how much you should have saved for retirement based on your age and current income.

Where do you stand?

If you’re like most people, you’re behind, and you’re worried about it. In fact, 61% of respondents in a recent survey of American adults said they were more scared of outliving their money than they were of dying. Think about that!

Among people ages 44 to 49, that number climbed to 77%, and a whopping 82% of those in their late 40s who are married and have dependents were more afraid of outliving their money than they were of death.

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What’s more, increasing life expectances mean that Americans are spending more years in retirement. Couple that with pensions being a thing of the past, and it’s not exactly a rosy picture for fulfilling your retirement dreams.

So, what do you do about all this?

You need to have a plan. Most people begin by asking “What’s your number?” — or what size nest egg do you need to quit working?

I’ve written before that this might be the most useless question in retirement planning, because usually the answer is of the one-size-fits-all variety when, in fact, everyone is different.

Like so many things in the financial planning business, the question takes something complex and full of nuance, and effectively dumbs it down to the point where it doesn’t mean anything. And that’s because it misses the bitter truth about retirement: you never know how much you’re going to need.

Think about it. Who wants to spend their golden years slowly depleting their nest egg hoping they don’t outlive it?

The above chart does a good job of providing a framework, but there’s even more you can do to figure out how much you should have by the time you want to retire.

Some say that to retire successfully you should multiply your final salary by a factor of 10. So if in your late 60s you expect to be earning $150,000, you’d need $1.5 million to retire.

But does that actually work? Using the standard “4% Rule,” which means that when you’re in retirement you withdraw no more than 4% of your portfolio value per year, that would give you an annual income of $60,000. That might be just fine.

Or it might not.

What if you need more than $60,000 to pay your bills? What if the stock market has a major setback early in your retirement and your $1.5 million gets chopped down to $750,000 or less?

You might roll your eyes now, but that’s exactly what happened to millions of people that retired or were planning to retire just before the last two bear markets.

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The bigger, more fundamental problem with the “number” approach is this: it makes no consideration of market valuations or expected returns.

Let’s say stocks are cheap and priced to deliver returns of 10% per year or more. Taking out 4% per year in retirement would be perfectly prudent and reasonable. In a raging bull market like we’ve enjoyed for the past couple of years, it wouldn’t have hardly made a dent in your portfolio.

But today, using common valuation metrics like the cyclically-adjusted price/earnings ratio (CAPE), stocks are priced to lose money over the next 5 to 10 years. That means that even a 4% withdrawal rate risks depleting your nest egg early in retirement.

This is no way to plan for your golden years. It’s income that pays your bills, not a big ol’ fat nest egg full of assets. Focusing on an asset number rather than an income stream is like putting the cart before the horse.

I’m not willing to leave my retirement to the whims of chance. Are you?

This is what I recommend you do…

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Use this three-step process below to figure out how much you need per year from your personal retirement accounts. (This is in addition to Social Security and other pension accounts you may have.)

Of course, with bond yields scraping along near all-time lows, securing this number may seem easier said than done. But it’s really not difficult if you know where to look.

And that’s where I come in, to help guide you in the right direction so you can get on your way to fulfilling your retirement dreams.

1. How much income do you need (or want) each year in retirement? ____________________________ (Try to be honest and reasonable and let your current monthly expenses be your guide.)

2. Now, multiply that number by 1.2: ____________________________ (This is to add 20% to your number. You know as well as I do that expenses always seem to find a way of turning out to be more than you expected. That’s just life.) This is your real retirement income number.

3. Now, subtract the following. Annual Pension Income: ________________ Estimated Social Security Income: ________________ Other Retirement Sources: _________________ The result is how much you need to have in your private retirement accounts each year: _______________________________

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With the Peak Income service, I’ve designed a product intended to put a steady stream of income in your pocket each and every month – to the tune of 17% returns every year. That’s enough to triple your nest egg every seven years.

I’ll tell you all about it in this detailed report, and in the monthly issues and weekly updates to arrive in your inbox. (You can also find all of these on your members-only section of the Peak Income website.)

I hope you remembered to include enough money in the worksheet above to cover your retirement dreams…

After all, we’re not talking about just basic income here. We’re talking about having enough money to support everything you need and then some.

That means you should also enough money take a little risk with an active trading strategy. Or really swing for the fences and use a little to buy bitcoin or another cryptocurrency.

And, speaking of that, I’d like to know your retirement dream. Write down your top three, then share them with me (pictures, text, anything you want) with an email to peakincome@dentresearch.com.

Your top three retirement dreams:

1. _________________ 2. _________________ 3. _________________

I can’t promise I’ll respond to every message, but I would love to hear from you so I can better help you — no matter what your number is.

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Section 2: Find Your Retirement Buddy

Let me be clear, as an investment research firm, we are not allowed to provide personalized investment advice.

I can’t answer questions about your particular situation and I can’t advise you about how to trade your own account.

What I can do is provide general research, a model portfolio with recommended trades, and examples of people who may match your own personal situation.

With that in mind, which one of these is most like you?

Identifying with one buddy, even if not exactly your type, will help you apply everything to your personal situation as I move through explaining your Million-Dollar Retirement Catch-Up Plan.

John Age: 50 Occupation: Manufacturing Current salary: $75,000 Current retirement savings: $100-$150k Wants to retire at: 65

Retirement goals: “I know Social Security won’t address all my needs, so I need to make sure I have enough in private accounts. I’d love to have enough to own my own fishing boat when I retire.”

Hobbies: Hunting, fishing, spending time with my wife

Using our three-step process, John determined he should have $292,500 right now and $700,000 by age 65.

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Look how quickly John could get back on track with our Million-Dollar Retirement Catch-Up Plan – and then some.

John could reach $1 million by age 65 and end up with over $600,000 more than if he leaves it in a traditional 401(k) at 8%.

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Paul Age: 60 Occupation: Sales executive Current salary: $150,000 Current retirement savings: $500,000 Wants to retire at: 68

Retirement goals: “I’ve spent a lot of time on the road in my career traveling around the Northeast, so I’m ready find a nice, warm place where I can have the kids and grandkids over.”

Hobbies: Movies, classic cars

Paul determined he should have $1.36 million right now and close to $2 million when he wants to retire. He could potentially retire in half the amount of time if he puts his money in the Million-Dollar Retirement Catch-Up.

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Nancy Age: 60 Occupation: Small-business owner Current salary: $100,000 Current retirement savings: $250,000 Wants to retire at: 70

Retirement goals: “I really like my work and we’ve built a great educational business. I just want the freedom to keep up my lifestyle, and not worry about any healthcare expenses to come.”

Hobbies: Tennis, golf, travel

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With the Catch-Up plan, Nancy could have $1.2 million by the time she’s 70, well above the $530,000 she’d have in a traditional 401(k) returning 8%, and enough for her to retire.

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Jake Age: 35 Occupation: Writer/editor Current salary: $65,000 Current retirement savings: $25,000 Wants to retire: 72

Retirement goals: “I’m not sure what the world will look like by the time I’m supposed to retire. I want to keep building up enough money for whatever comes my way.

Hobbies: Fantasy sports, video games

Jake has what most of us don’t: time. He might not know it, but he could be on track to early retirement with the Million-Dollar plan, potentially growing his account to over $2 million by the time he’s in this early 50s!

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Section 3: How to Build a Rock-Solid,

Conservative Portfolio Capable of 17% Annual Returns

OK, let’s get down to business.

It’s about time I tell you about my grandfather. He’s actually the reason I got into the financial world.

He wasn’t a stockbroker or a portfolio manager. In fact, as the owner of an auto supply store in Fort Smith, Arkansas, he was about as far removed from Wall Street as you could get. But he was a savvy investor who knew a thing or two about the importance of income.

Apart from his dividend-paying stocks and his bonds, he also owned a small warehouse that threw off rental income. The key was that his income sources were diverse, which gave him protection in the event that one of his stocks or bonds blew up.

My grandfather never actually retired – he was the entrepreneurial sort who preferred to die with his boots on – but the income streams he put together supported my grandmother for more than a decade after he was gone. They could have easily continued to do so for decades more.

My grandfather also had his own version of Peter Lynch’s mantra of “buying what you know.” Lynch, the former manager of the Fidelity Magellan fund and the most successful retail mutual fund manager in history, was known to troll the malls looking for investment ideas.

Well, in my grandfather’s version of “buying what you know,” he liked to invest in local Arkansas companies. He liked the idea of physically being able to keep an eye on his investments, and he reasoned that he’d be better able to understand a company in his backyard than one hundreds or thousands of miles away.

It just so happened that a little retailer you might have heard of – Walmart – was a local Arkansas company, headquartered about an hour and a half from Fort Smith. My grandfather believed in the company and was an early investor.

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And when the shares exploded in the decades that followed, he rode it all the way up.

In Lynch’s words, my grandfather nabbed a “10-bagger,” making over 10 times his money on that investment.

Here’s the thing: Walmart made him a boatload of money, but he had no way of knowing that would happen when he originally bought it. And he certainly wasn’t banking on it supporting him or my grandmother in retirement. Had he lived longer, he might have sold some of it to rebalance or to splurge on some of life’s little indulgences.

But it was never his plan to live off of his capital gains because those can evaporate in a heartbeat.

This is exactly why I write my own income-based newsletter.

Just like my personal approach, my goal is to help you meet that baseline of income you need to fund your retirement. Don’t get me wrong, I like scoring big with capital gains as much as the next guy, but that’s not our goal here — we want to accumulate and take ownership of steady income streams.

Most financial advisors think of retirement planning in two phases – the accumulation (growth) phase and the distribution (income) phase.

Unfortunately, because more than 90% of us aren’t setting aside enough for retirement, we’ve created a third – the catch-up phase.

I break the phases down like this:

Stage 1: Accumulation – The period during our early working years when we’re setting money aside for retirement, usually in a company-sponsored 401(k). You may also have other accounts like a personal IRA, a Roth IRA, or even a self-employed retirement plan if you own your own business.

Stage 2: Catch-Up – The period we typically hit at or around age 50. This is typically when we reach the point where our kids have gone off to college and we’re close to becoming empty nesters. We take an honest look at where we are financially and realize we’re further behind than we should be. If this is you, it’s not uncommon. And it’s why the IRS actually has laws on the books that allow you to make additional “catch-up” contributions to your retirement accounts after age 50. While The Million-Dollar

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Retirement Catch-Up can be used in any of these stages, I’ve specifically designed it to help you quickly and safely grow your money in this stage.

Stage 3: Distribution – This is the period when you finally decide to retire. I’ll show you in Section 7 how to make one simply change and switch the Million-Dollar Retirement Catch-Up Plan from the catch-up phase to the income phase.

So, how will we create enough money to successfully navigate all three stages?

When we first launched Peak Income in early 2016, it was exclusively a closed-end fund (CEF) newsletter. As I’ve told you, CEFs are America’s Greatest Income Secret and are an often overlooked portion of the market that 1) produce reliable income streams and 2) can often trade at a discount, leading to even possibly greater returns. At the time, we started the newsletter, our approach was more a product of CEFs being cheap at the time than anything else. I always expected the investment universe to expand based on market conditions and prices.

Today, we have a much broader selection of cheap income plays at our disposal: CEFs, equities, real estate, taxable fixed income, tax-free municipal bonds or master limited partnerships (MLPs).

And, importantly, we want to be in holdings be positioned to give us the highest (and safest) returns at any given moment, as the market dictates. That’s the service I provide in Peak Income.

For instance, in October 2017, the majority (52%) of our holdings were in bond funds, with tax-free municipal funds making up 22% of that total. Real estate investment trust (REIT) funds chipped in another 17%, and funds that invested primarily in stocks made up 31% of the portfolio.

By the start of March 2018, half of the model portfolio was is invested in equity closed-end funds (CEFs) and another 15% is invested in MLPs. Only about 36% is invested in bond CEFs.

This brings me to the safety component of the portfolio: stop-losses.

The complexion of our portfolio evolved as older positions were “stopped out” and new positions added.

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For each recommendation I provide in Peak Income, I also give you stop-loss instructions. This is exactly what it sounds like.

This is a price that we will sell at if the investment dips to that price for whatever reason. Typically, as our returns go up, I will raise this number in order to lock-in profits.

You can keep track of these prices yourself (I will update you on them in your weekly emails, and they are available in our monthly issues and in the members-only section of DentResearch.com) or you can use a third-party service such as TradeStops to do the work for you.

The platform will send you alerts whenever a stop-loss is hit. (I, of course, will send you alerts as well, but I can’t say enough about the TradeStops product. I use it personally and as a subscriber to this newsletter you are eligible for a special $500 discount. Click here to learn more about the product.)

No matter your retirement situation — if you’re in that long-term growth phase and are on pace for retirement, find yourself in catch-up mode (age 50-and-over and behind your target numbers), or in the income phase (and ready to retire with the cash you’ll produce every month) — these components are the framework of a rock-solid portfolio designed to give you 17% returns each year.

And there’s one other really big thing…

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Section 4: The Six-Figure Secret to The Million-

Dollar Retirement Catch-Up Plan If you don’t believe in the power of dividend reinvestment, or compounding, try this experiment:

Take 1 cent and double it 30 times.

That’s like starting the month with a penny and finishing the month with $10 million.

This is what it looks like when you graph it out:

The vertical line almost looks like a rocket taking off, doesn't it?

Of course, it’s impossible to double your money every day for a month. Doubling your money just one time is hard enough.

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But this graph does show you something very important you can apply to your investing right away, especially with the investments in the Million-Dollar Catch-Up Plan Portfolio.

The Magic of Day 20 Notice that for the first 20 days — for a full two-thirds of the month — compounding barely makes a difference in your wealth. For all intents and purposes, it’s

a flat line.

Then, on the 20th day, you get lift off. And six days later, on day 26, you’re off to the races. Just six days makes the difference between a decent return and an out-of-this-world return.

There are two important lessons here:

1. Income investing means investing for the long-term. If you’re spending your income for living expenses, you want your income to last the rest of your life. If you’re reinvesting and thus compounding your income, you need to stay the course until the 20th day. After that day, your wealth starts to skyrocket.

2. On “day 20,” you start becoming wealthy faster than anything else you could be doing, other than hitting the lottery. The “slow boat to China” suddenly becomes the supersonic rocket to the moon.

The conventional wisdom is that compounding income is safe and steady — and it is. But that’s not nearly all. It’s also an incredibly fast way to get wealthy when you stay with it for the long term.

Just look at that vertical line in the graph! And then remember this: You started with just one cent.

Your entire investment — the only money of your own you risked — was one cent. In the example above, you put in no new money after you invested your penny.

In terms of risk-management, you can’t get any better than this.

But let’s stay with this example and say you put in new money every day. This graph line would go vertical a lot sooner and go much higher. You’d be even richer even sooner.

The magic of “Day 20” might become the magic of “Day 10.”

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Continuing to invest new money on a regular basis increases the rate at which you become wealthy many times over.

Of course, many people have trouble investing regularly, whether it be every day, week, month or even once a year.

In fact, not investing regularly is the one thing that stands between most people

and their dreams of financial independence.

Now You Can Invest Every Month Fortunately, the Peak Income strategy solves this problem. And makes it easy to invest a nice chunk of money every month.

This is because the investments I recommend pays you, if not monthly, quarterly, semi-annually or yearly.

What could this mean for you? Let’s take a modest example.

Johnson & Johnson, the largest health care corporation in the world, has also been one of the most stable of the past 25 years. It’s gone more than 25 years without reducing dividend payments.

Every $1 invested in Johnson & Johnson’s stock in 1990 would have turned into $24.46 by the end of 2015. In those 25 years, the company created compound returns of 13.6% a year for its investors.

That means a $10,000 investment would have given you six-figures — $244,600 — if you held on to the stock and simply reinvested the dividends.

Here’s another example from our portfolio…

Assume our buddy from earlier — John — invested about $55,000 into one of my recommended buys right now: The BlackRock Taxable Municipal Bond Trust (NYSE: BBN).

With a very healthy current annual yield of 7.6%, you’d get a check for $319.76 every month.

And let’s also say you reinvested your check back into BBN.

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This may not sound like a lot of money, but watch:

At current prices, at the end of 15 years of compounding, which is when John wants to retire, he’d have a whopping $119,469.29 in new cash.

That nearly doubles John’s retirement savings right now by investing only a third of his nest egg. And this is just one example of using one of our holdings.

Sound complicated? Not a bit. If you’re in catch-up mode—like most Americans are—set up your dividends to automatically invest through your broker.

And if you’re ready to use the income generated each month, once you’ve built up your nest egg, turn off the dividend reinvestment and enjoy the monthly income headed your way.

As long as you stick with it, the Peak Income strategy can give you more money to live on now... and a lot more money to live on later when you retire.

You have to stick with it until you reach your “day 20” “Magic Day 20” to see the big results.

But as an income investor, you already know you need consistent income for the long-

term to make your money last for the rest of your life.

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Section 5: What We’ll Trade to Safely Grow

Your Nest Egg to $1 Million I’ve already told you about the greatness of closed-end funds (CEFs). They are a big part of the Peak Income approach, but they’re not the only part.

(And if you missed my explanation of what CEFs are all about check out your report “America’s Greatest Wealth Secret.”)

Let’s talk about what else will fill your Million-Dollar Retirement Catch-Up portfolio, starting with real estate.

We’ve always been told that it’s the American Dream to own your own home. People go to work at their 9 to 5 jobs in the hope that they can afford to come home to a two-story colonial with a perfect white picket fence. Don’t get me wrong — that sounds picturesque. And if that’s the kind of lifestyle that you’ve enjoyed over the years, I say good for you.

But as you’re probably aware, that’s not the end of the story. In recent years, we’ve also heard real estate touted as the next great investment opportunity. I’m sure you’ve heard all of the usual arguments: interest rates are low and the banks are lending again, so it’s easy to get a loan for an investment property… you’ll be able to buy low and sell high if you work on a fixer-upper… real estate has a tangible asset value… it’s a great inflation hedge… and it’ll provide stable income returns if you choose to rent out your property.

But what if you don’t want to deal with the burdens of being a property manager?

Think about it. When you own property, everything is your responsibility. If your tenant calls and tells you that a pipe burst in their kitchen, it’s on you to shell out money for that repair. The roof is leaking? Guess what — that’s your problem, not theirs. And how well do your clients understand the finer points of your lease agreement? Chances are, you’ll have to deal with a compliance issue or two… or several.

Then there’s the fact that most states require you to have either a Real Estate Broker License or a Property Management License before you can even think about renting out your apartment complex or office space.

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And lastly, there’s the small — ahem, huge — fact that we’re in a housing bubble both here and abroad. My colleague, Harry Dent, has been warning us about this for years. He even thinks that the real estate market could crash harder than it did in the 2008 meltdown. So why the hell would you want to give yourself that kind of headache? Are any small real estate profits you could skim from the endeavor worth all of that aggravation?

No, they’re not! But I’m here to tell you that you don’t have to go through all that trouble. That’s because I’ve found a way to invest in real estate while skipping the headaches of owning real property while collecting fat paychecks every month at significantly less risk than a traditional property manager.

Use REITs to Secure Your Financial Future A Real Estate Investment Trust — aka “a REIT” — is a company in the business of owning and operating real estate. They’re generally publicly traded (though some are privately held) and they usually own income-producing properties such as office buildings, stores, apartment buildings, and shopping centers. Other types of REITs own hospitals and nursing care facilities, and some even own real estate loan portfolios. These portfolios can consist of just a few properties or hundreds of them. And they make profiting from real estate easy.

You get professional management and a degree of diversification that would be impossible if you were buying individual properties yourself. This makes owning REITs a lot less risky than trying to become a real estate mogul on your own.

Even better, they are what’s called pass-through investment vehicles. This means they must distribute at least 90% of their income to shareholders as dividends each year to avoid paying double taxes!

Over the last 20 years, the average annual returns are a little over 11%, while the S&P only returned 9.85% and the Russell 2000 returned 9.63%. I’d be willing to bet your return on any rental property was even less, while being an immense pain in the ass.

REITs are one of the best ways to build a steady stream of income, allowing you to increase your monthly dividend payments AND dabble in the real estate market without the usual hassle.

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Of course, you can’t just invest in any-old REIT. I’ll guide you in the right direction in the months to come.

The World of MLPs As another example of what will comprise our model portfolio, let’s take a look at the world of master limited partnerships (MLPs). These also trade like stocks and can actually be found in a lot of good CEFs. MLPs tend to hold things like oil and gas pipelines and have become a mainstay of retiree portfolios in recent years because they tend to throw off a lot of stable, tax-deferred income.

MLPs trade like other stocks, but their company structure is a lot different. MLPs are limited partnerships, not corporations. That means shareowners are limited partner unit holders, not corporate stockholders.

That might sound like semantics, but there are some real differences. Unit holders don’t enjoy voting rights, for example. Though typically, they could care less. Frankly, most individual investors don’t vote in shareholder meetings anyway.

But the biggest difference — and sweetener — is the tax advantage. Limited partnerships do not pay taxes at the corporate level.

By avoiding these taxes, limited partnerships have a lot more cash available to distribute to investors. And that’s an advantage corporations simply don’t have — and why trading MLPs can be so lucrative.

Now, while MLPs don’t necessarily have to be oil and gas related... they almost always are. And the vast majority are midstream pipeline operators.

If you’re not familiar with the terminology, “upstream” refers to oil and gas exploration and production, and “downstream” refers to refining operations. “Midstream” is what happens in the middle. Midstream pipeline operators transport crude oil, natural gas and related products.

Historically, this has always been considered the safest corner of the energy industry. It’s the one with the least sensitivity to oil and gas prices, which can be wildly volatile. Midstream pipelines came to be these companies own critical infrastructure that our economy needs to function, and for the most part they have near-monopoly positions in their respective routes. Regardless of its price, energy still needs to be moved from

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point A to point B, and last I checked our homes still needed gas for hot water and heating.

And, right now, MLPs are providing great dividend opportunities, as one of the last cheap sectors of an overheated market.

A Few Others… We’ll also invest in preferred stocks when the price is right. Think of them as a cross between a stock and a bond.

When companies issue preferred stocks, they generally set a fixed dividend that gets paid every year. Preferred stock is “preferred” in the sense that it takes priority over regular common shareholders for dividend payments and, in the worst case scenario, during a liquidation following bankruptcy. If the company misses a preferred dividend payment, then they generally can’t pay dividends to regular common shareholders before they’ve made up the payments in arrears. This income stream is just part of the reason why they call it preferred stock.

By investing in preferred stock funds rather than individual preferreds we protect ourselves from over-owning a single stock or two through diversification. Even if something does happen to one of America’s strongest companies, the impact will barely be felt by our portfolio.

I also like to invest in a corner of the market that has long been popular with institutional investors: convertible bonds.

For the uninitiated, convertibles are bonds that can be converted into company stock at a fixed price, generally well above the current stock price. So they can be thought of as a bond with an out-of-the-money call option embedded within.

Companies choose convertibles over traditional debt or equity for a couple reasons. To start, shareholders tend to get angry when a company issues new stock, as that dilutes the existing shareholders and usually pushes the stock lower. Issuing a convertible pushes that dilution further into the future. Hopefully, by then, the company will have grown to the point that the investors will be less annoyed by a little dilution.

The second reason to issue convertible debt is simply to lower borrowing costs. The embedded “call option” is a sweetener that allows the company to offer a lower yield.

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Essentially, the company is trading lower interest expense today (a hard cost) for potential share dilution later (a softer, non-cash expense).

For our purposes, convertibles do several things for us:

1. They give us equity upside if the stock market continues to go higher. 2. They have less downside than owning stock outright, as bonds are more stable. 3. They give us diversification away from straight bonds or straight stocks.

Bonds don’t get a lot of love these days, as the yields on offer simply aren’t appealing enough to make them worth owning.

But closed-end bond funds are a very different story. By buying them at an attractive discount to net asset value and adding a little leverage, you can transform the mundane world of bonds into something that actually generates a respectable return.

The world of bond CEFs can be divided into two camps: tax-free municipal funds and taxable bond funds.

Municipal bonds issued by state and local governments have long been a favorite of high-earning investors because the bond interest is tax-free. Interest is generally taxed as ordinary income. So if you’re in the 35% tax bracket, you’re giving 35 cents of every dollar earned as interest to the tax man if you’re invested in regular, taxable bonds.

Muni CEFs buy diversified pools of municipal bonds and often borrow a little money to juice the returns. Additionally, as with all CEFs, you can often buy muni funds at a discount to NAV.

Between the leverage and the discounts to NAV, it’s not uncommon to see muni funds yielding 5% or more. And remember, that’s tax-free. So a 5% muni yield is the equivalent of 7.7% taxable yield. And that’s not too shabby in this market.

Of course, because they don’t have the same tax benefits, corporate, mortgage and U.S. government bonds often trade at higher yields. So, taxable bond funds can play a role in diversified income portfolio too, particularly if you’re investing via an IRA or some other type of tax-advantaged account.

Depending on the duration and credit risk you’re willing to tolerate (and depending on current pricing and discounts to net asset value), you can often find taxable bond funds yielding 7% to 9% or even more.

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And again, that’s just the current dividend yield. A disciplined investor can often generate decent capital gains on top of that by buying when discounts are particularly wide.

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Section 6: Legally Dodging the IRS

With passage of the Tax Cuts and Jobs Act late in 2017, the tax burden for millions of Americans will be a little less bad in 2018 and beyond.

That said, high income earners will still pay as much as 37% in taxes on short-term capital gains and bond coupon payments. So, we should do everything we can to legally dodge the IRS by making efficient use of IRAs, Roth IRAs and other qualified accounts.

In an ideal portfolio, all of your assets are held in a qualified account, and taxes aren’t a consideration. But, for most investors, the retirement nest egg is going to be a mixture taxable and tax-free accounts.

As a general rule, you want to put the most tax-inefficient investments in an IRA or Roth IRA and put the most tax-efficient investments in a regular, taxable brokerage account.

This is best explained by example. Municipal bonds and funds are the most tax-efficient investments you’ll ever find, as they are tax-free. There is no reason to waste valuable IRA dollars buying something that is already tax-free. So municipal funds should always be held in a taxable account.

The same is true of master limited partnerships (MLPs). Even though MLPs tend to pay large cash distributions every quarter, most of this is considered to be a tax-deferred return of capital due to depreciation and other non-cash charges. MLPs should be held in a taxable account.

At the other end of the spectrum, you have taxable bonds and fund of funds, which pay out interest taxed as ordinary income at your marginal tax rate. Bonds are extremely tax inefficient, so it’s best to hold them in an IRA or other tax-deferred accounts.

The same is true of stocks you intend to hold for less than a year. You’re going to get hosed at the short-term capital gains rate, so it’s best to hold in an IRA and avoid the taxes altogether.

Buy-and-hold stocks and fund investments are somewhere in the middle. If you’re buying and holding, you’re not generating much in the way of taxable capital gains in any given year.

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You’ll have a modest amount of dividend income, but this is generally taxed at the favorable qualified dividend rate of 15% to 20%. So if you have room in your IRA after including your bonds and your high-turnover stocks and funds, you can fill in whatever space is left with your buy-and-hold positions.

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Section 7: Ready to Retire? Moving from

Catch-Up to Sit Back and Relax OK, let’s say your John and you’re starting out with $100,000 at age 50 today. With our Million-Dollar Retirement Catch-Up Plan you can potentially grow your nest egg to over $1 million by age 65.

That’s exactly what John wants to do so he can buy that fishing boat he’s always wanted, and live a worry-free retirement without relying on Social Security.

At that point, he can switch dividend reinvestment off and collect as much as $6,500 in income. That’s plenty enough for fishing trips, or anything else John wants to do.

With this amount of income, it won’t matter if Social Security goes belly-up between now and then.

And it’s not just John. Remember, Nancy, the small-business owner who wants to retire at age 70 without giving up her $100,000-per-year salary lifestyle, and fretting about healthcare expenses.

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With a $1.2 million retirement balance, she can bank $7,500 in monthly income once she’s ready to switch off dividend reinvesting. That should handle her tennis, golf and travel habits quite well.

With $500,000 now, in just eight years, sitting at $1.7 million, longtime sales executive Paul could expect more than $10,000 a month in income! He’ll be enjoying his dream retirement in sunny Florida in no time.

And 35-year-old Jake, with tons of compounding and dividend reinvesting time ahead of him, could have an astounding $51,000 headed his way monthly by the time he wants to retire in the year 2055!

And remember, these are all income examples from the growth of your private retirement account. We haven’t even taken into account what you could get from Social Security.

So, let’s talk about that next.

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Section 8: What to Know About Social Security

For most Americans, Social Security will be an important source of retirement income. For many, it may be their only significant source of retirement income.

So, the question of when to take your Social Security benefits – whether you take them early at age 62, hold out for the maximum benefit at 70 or opt for something in between – is one of the most important questions you have to address as you enter retirement.

If you take your benefits early, at age 62 (for those born before 1955) your payment will be 25% lower than it would have been had you waited to age 66. But if you delay until age 70, you could enjoy payments of up to 32% higher than you would have had you started the benefits at age 66. That’s a major swing.

Do you take your benefits early – and enjoy as much as eight additional years of checks in the mail – or do you bide your time and wait for the higher payout?

I’ll be straight with you. This can be a little morbid. Because your life expectancy plays a big role here. If you think you might live to a ripe old age, it makes all the sense in the world to hold out until age 70. But if you are in poor health or your parents and other close family died relatively young, you’re likely going to be better off taking what you can get early.

The numbers will vary a little based on income and birth year, but this is roughly how the math shakes out. The break-even age between taking benefits at age 62 vs. 66 is around 77. That means that if you die before the age of 77, you would have been better off taking the money early, and if you die after age 77, you would have been better off waiting until age 66 for the full payout.

The break-even age between taking benefits at 62 vs. 70 is a little older, around age 80. And the breakeven age between taking benefits at 66 vs 70 is about 82.

So, to paraphrase a quote from Clint Eastwood… do you feel lucky?

If you’re in good health and your parents lived long, healthy lives, consider waiting until age 70, particularly if you’re still working and enjoy your job.

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There are other considerations too. You can pass on your assets to your children, grandchildren or even a good charity. But your Social Security benefits stop the day you die (other than surviving spouse benefits). So, if giving is important to you, you might choose to take Social Security a little earlier so as to avoid drawing down your IRA or other retirement assets.

After a lifetime of paying taxes, it’s almost a little insulting to have to pay taxes on your Social Security benefits. Unless you plan to live extremely modestly in retirement, that’s unfortunately going to be the case. If your income is as little as $25,000, you’re going to pay taxes on at least 50% of your Social Security payout.

So, keep that in mind with structuring your portfolio. Having a portfolio with a lot of dividends, interest and realized capital gains can bump you past the threshold for making your Social Security check taxable. It’s probably worth it, of course. I’d rather have a higher income and pay taxes than live like a pauper and skip them. But if you can orient your portfolio so that most of the would-be taxable gains are in tax-free accounts like IRAs or Roth IRAs, you might be able to keep a few more of those dollars for yourself.

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Chapter 9: Million-Dollar Retirement

Catch-Up FAQs Maybe you’ve gotten to the point where you’re ready to act — but you might have a few questions. Here are answers to a few frequently asked questions I’ve gotten from readers since we launched Peak Income in 2016.

Q: I have only a small amount to invest. Which of your recommendations do you suggest I target first?

This changes constantly based on market conditions and what fund happens to be the best priced on any given day, but I tend to regularly highlight my favorite picks in your weekly updates and in the portfolio update section of the Peak Income monthly issues.

My choice will depend on what the market is doing at the moment. So I can’t emphasize enough: Read your emails from me!

Q: When can I expect to get paid and how much?

Most of the funds I recommend in Peak Income pay their dividends monthly, though a few pay quarterly. The payout dates are called ex-dividend dates in trader-speak. The best way to lock down each month’s ex-div date for our recommendations is by going to the fund company’s website, or a reliable exchange site and searching for the specific fund symbol, at the beginning of each month. Although, sometimes these dates aren’t announced until the last minute. When I recommend a new investment, I will spell out exactly when you can expect dividends to be headed your way. How much depends entirely on how many shares you buy. The more shares, the more opportunity you have to generate dividends, and either reinvest them to build up your nest egg, or cash them out to spend on your retirement needs.

Q: How will I get paid?

The investments I recommend in Peak Income generally pay dividends, either monthly or quarterly. By default, the dividends are usually just deposited in your brokerage account until you decide to do something with that. You can generally request payment via check, wire or ACH transfer, or you can leave the funds intact to be reinvested later. That’s purely up to you.

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Personally, I try to avoid paper checks because I don’t like the risk that they can get lost in the mail or stolen, and I hate driving to the bank to deposit them. I’m also still years away from retirement. So when I buy any dividend-paying security, I reinvest the dividends.

If you want a paper check, that can normally be done. Just call up your broker and instruct them to do exactly that.

Q: When the market crashes, would your recommendations crash too?

This is a question I get pretty often, and it’s a good one, particularly given how elevated stock prices are right now.

Yes, a market crash could indeed cause the price of our investments to crash, but this is exactly why we control risk with stop-losses. I mentioned them earlier you (and how, just for signing up for Peak Income, you have access to a special $500 discount to the TradeStops service I use every day to manage stop-losses). My goal in Peak Income is to safely generate regular, monthly income that can either be reinvested during the catch-up phase or withdrawn during the income phase. So I tightly control the risk we take, and I’m prepared to take a small loss in order to avoid taking a large loss later.

Q: I would like to know why you use stop-losses based on closing prices vs intraday prices. I get that this eliminates being stopped out due to intraday volatility, but if the markets are truly headed down in a market collapse, won’t the delay until closing maximize losses?

It’s a bit of a balancing act. There are times when a stock breaches its stop-loss early in the trading day and then continues to fall lower throughout the day, closing at or near its low. In those situations, you would have been better off selling earlier in the day.

That said, those days are relatively rare, and in my experience the additional losses taken from holding until the close usually only amount to a couple percent. I’ll gladly risk those few extra percentages of loss in order to avoid a massive catastrophe due to a flash crash or some other short-term blip.

Q: I live outside the U.S. Any special things I need to do?

Not really. So long as your brokerage account has access to the U.S. stock market, you should be able to buy everything I recommend in Peak Income.

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The “tax-free” municipal funds, however, might be far less attractive since you’re probably not going to get the same tax benefits outside of the United States. Owning them shouldn’t create any headaches for you, but your yields might be less attractive. American investors are generally willing to accept lower yields on muni bonds because, after taxes are taken into account, they are still very competitive.

Additionally, depending on where you live, you might have taxes withheld on the dividends received. I’d recommend you chat with a local tax accountant if you have any tax-related worries.

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Section 10: Million-Dollar Retirement Catch-Up

Plan Model Portfolio Without further ado, let me introduce you to the current Million-Dollar Retirement Catch-Up Plan Model Portfolio.

As I mentioned in Section 5, our model portfolio is often changing, so click here for the most up-to-date positions in the Peak Income portfolio, along with links to every issue I’ve ever published.

You’ll find a mix of CEFs, REITs, Tax-Free Muni Funds and Taxable Bond and Preferred Funds, all with clear buy and stop-loss instructions, as well as current yields.

This is the start of your Million-Dollar Retirement Catch-Up!

How and Where to Invest Buying the investments in our model portfolio couldn’t be easier. The funds trade like stocks, so you simply contact your brokerage firm and enter an order for the number of shares you want to own.

Of course, you need a brokerage account to get started. You probably already have one, but just in case here’s a list of well-known brokers to help you get started.

• TD Ameritrade - www.tdameritrade.com - 1-800-454-9272 • Interactive Brokers - www.interactivebrokers.com - 1-877-442-2757 • Charles Schwab - www.schwab.com - 1-800-435-4000 • Fidelity - www.fidelity.com - 1-800-343-3548 • E*TRADE - www.etrade.com - 1-877-921-2434 • Scottrade - www.scottrade.com - 1-800-619-7283 • Trade King - www.tradeking.com - 1-877-495-5464 • Trade Monster - www.trademonster.com - 1-877-598-3190

You can find ticker symbols, real-time prices, returns and buy or sell instructions right here in our ePortfolio and in each and every one or our monthly issues at DentResearch.com/Peak-Income.

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I will also send you weekly updates every Thursday and immediate trade alerts if a position falls below our stop-loss and requires us to sell, or if a new buy opportunity presents itself between our monthly issues.

Thank you for joining Peak Income.

Charles

P.S. – Don’t forget to send me a quick note with what your retirement dreams are. It will better help me understand what you are looking for, and of course, if you have any questions, feel free to ask as well with an email at any time to PeakIncome@DentResearch.com!

Additionally, if you need to talk to our customer service team at any time, you can reach them at 888-211-2215, Monday to Friday, 9 a.m. to 8 p.m. EST.

Have a question or comment? Contact a member of our customer service team toll free at 888-211-2215, Monday through Friday between 9 a.m. and 8 p.m. EST, or write to us at peakincome@dentresearch.com.

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