Under the old rules, determining your mandatory payout rate involved making irrevocable choices based on messy guesses, such as which spouse would die first.
The Dividend Integrity Index simply divides the past 5 year dividend growth rate by the dividend payout ratio, and listed values greater than one.
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Another possibility, says Robert Gordon, president of Twenty-First Securities, is "auction-rate preferred, " whose payout adjusts up and down with interest rates.
The higher the Index value the better, because it either has a high 5 year growth rate tempered by a fairly low payout ratio, or a modest growth history with a very low payout ratio.
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The dividend payout ratio was 30.6% in 2011, above the rate of 20.8% in 2009 and 24.2% in 2010.
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While most HECM reverse-mortgage options carry adjustable rates and offer a line of credit or annuity-like payouts over time, the sole fixed-rate HECM choice is available only with a lump-sum payout.
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Daniel Wiener, editor of The Independent Adviser for Vanguard Investors, points out that Vanguard's goals for two of the funds are tied to inflation, while Managed Payout Capital Preservation's goal is to produce a 7% distribution rate.
TRUs and "power of adjustment" trusts share another advantage: The income beneficiary can get more of his payout in the form of capital gains, taxed at a maximum 20% rate.
Up until recently many banks and other large companies had been toying with the idea of delaying bonuses from their traditional payout dates in January, February and March until after the April 6 step-down in the tax rate.
The fact that their benchmark rates are well below their minimum payout has been viewed as a negative and thus, the market is pricing them to provide yields comparable to fixed rate issues.
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