Members of the “Baby Boomer” generation are defined as those Americans who were born during the post World War II baby boom, specifically from 1946 through 1964. I consider myself part of that generation even though I arrived a bit before, reaching retirement in just enough time to get a preview of what was ahead for all of the rest of you. I was one of the lucky ones…in a position to retire early from my principal career and take up other things that I always wanted to do but seldom had the time to do, like writing. 

Looking back at life over earlier, simpler decades, who among us could have ever imagined we would experience the wars, political and societal changes, and economic hardships that came to pass as we approached retirement? The point of this guidebook is to help Boomers pick up the financial pieces and get a decent return on our retirement investments in a climate where such an achievement is anything but certain.

The principal asset classes we think of as our investments for retirement have all become nothing short of a train wreck. The stock market in general is trading where it was twelve years ago (with the Dot-Com Crash and the Great Recession providing the bookends). Interest rates are at historic lows thanks to easing by the Federal Reserve, depriving seniors of almost all of the returns they have been used to in the past from such traditional sources as bank CDs. The ten-year U.S. Treasury bond yields little more than 2 ½%. Enormous wealth has been lost in residential and commercial real estate in recent years following the implosion of the debt bubble in which most of us were involved. One out of every four homes in the United States today is underwater…worth less than the mortgage(s) on them. And the rapidly increasing federal debt does not bode well for our future financial security as individuals, or as a country. Our problems go well beyond the excessive borrowing that brought on this financial maelstrom. For decades, financial security at retirement could be compared to a three-legged stool…the legs representing Social Security, a pension and personal investments. Is that stool still standing today?

We continue to hear about the looming insolvency of the Social Security system. In 1940 there were 42 workers to support benefit payments for each retiree. By 1950 it had declined to 16. Today the number is 3.3, and by 2030 projections indicate that there will only be 2.2 workers for every recipient of Social Security.
 In addition to the huge number of people in the baby boom generation (it’s own “bubble”), also contributing to the problem is the fact that in 1940 the life expectancy of men was 61.4 years and 65.7 years for women. Today the life expectancy for men is 74.2 years and 79.5 years for women…and growing. And, even though we hear the term “Social Security trust fund” from politicians, in reality no such fund exists beyond intergovernmental IOUs. The money has been spent, making the ability of our government to pay for benefits in the future solely dependent on future revenues from taxes we pay to the goverment. 

We have also seen pensions, the second leg of the stool, start to wither away. Increasingly, large American companies have converted existing pension plans to so-called “cash balance” plans because they require smaller company contributions. They also favor younger workers, to the detriment of those who are about to retire. Other companies are terminating their defined benefit pension plans altogether and fewer companies are starting new ones, choosing instead to establish retirement plans such as the 401(K) that does not require contributions by the employer (some plans are even structured not to include employer contributions) and will not pay a specific benefit to retirees, as does a defined benefit pension plan. Today only about 20% of private sector employees are covered by traditional pension plans.

The third leg seems to be in trouble too. At a time when it is more important than ever for individuals to save and invest for themselves, studies indicate that, until the aftermath of the recent Great Recession, Americans were saving less and less for their own financial security and retirement. In a broad survey by the Employee Benefit Research Institute (EBRI), 54% of the respondents said they had not even tried to calculate how much money they would need for retirement. A national survey commissioned by the Del Webb Corporation indicated that 60% of “baby boomers” polled believe they will not have enough money to retire on time. When asked how much money boomers thought they needed to retire, half claimed they did not know.

Added to this are the downbeat predictions of financial experts such as Bill Gross and Mohamed El-Erian of highly respected PIMCO, Warren Buffett (arguably the most successful stock market investor for many decades) and now deceased John Templeton (a pioneer in the mutual fund industry and the founder of the Templeton Funds). These experts, among many others, have been predicting that we may see more modest investment returns in the stock market for perhaps decades to come. Further impacting our investment returns are the lowest interest rates since the Great Depression in the 1930s, expected to last well into the future. Bill Gross paints a dire picture for those of us who need to obtain something more than just a few percent investment return, as stated on the PIMCO Web site ( “The unmistakable fact is that future investment returns will be far lower than historical averages. Investors are faced with 2.5% yielding bonds and stocks staring straight into new normal real growth rates of 2% or less. There is no 8% there for pension funds. There are no stocks for the long run at 12% returns. And the most likely consequence of stimulative government policies that strain to get us there will be a declining dollar and a lower standard of living. A future of low investment returns, and a heap of trouble for those expecting more, is what lies ahead.” (Investment Outlook by Bill Gross; October, 2010.)

The big issue for us Boomers is this: even assuming that we can step up our savings significantly for retirement, how can we generate sufficient income on investments in our retirement given the prospects for a slow-growth stock market and the low interest rate environment that may persist for many years to come?

All of these major issues affecting our financial lives are now converging on our ability to retire early, or on time, or at all. The long-term prospect of low returns from both equity and fixed-income investments demands of us more than ever that we devote significant energy to planning our earnings, expenses, asset accumulation, debt creation/elimination and investment decisions so we have a personal roadmap leading us to success, and so we can make adjustments along the way.

While each of us needs a broad-based financial plan (and as the author I provide you with a means of creating one that comes with this guidebook), clearly one of our greatest challenges is how we can achieve a reasonable rate of return on our investments for the long term, especially given the trends of stock market investments in recent years and the current pathetic yield on fixed income investments.

This book will narrowly focus on what I believe to likely be the single best opportunity to achieve consistent double-digit income returns that provide the potential to outpace other alternatives now and into the future. 

The strategies detailed in this guidebook are readily understood, easy to implement yourself in the convenience of your own home without further advice, and will work as a permanent program for the rest of your life. The program involves (1) the selection of high dividend paying common stocks of very large, highly recognizable companies and Exchange Traded Funds (ETFs) to provide substantial dividend income and (2) writing covered call options on the shares selected to provide a secondary source of premium income in addition to the dividends. The book details a second strategy of writing put options on such shares as an alternative to writing covered calls. Put writing can generate consistent, predictable income, but also provide an opportunity to purchase these shares at a price below current market value. I have successfully utilized both strategies of writing covered calls and put options for almost thirty years myself. The fact that I used these strategies was one of the reasons I was able to retire early and continue to enjoy double-digit returns on my investments.

I realize that you may not know anything about these strategies and that some of the terms mentioned here may already be totally unfamiliar to you. For now, trust that everything you need to know is in this guidebook. By the time you have finished the book, you will be very knowledgeable about the entire process…even comfortable with it. Best of all, if you want to practice option writing on paper before committing real investment dollars, you can see for yourself how it works for as long as you like until you are ready to allocate your investment dollars at the time of your choosing. The strategies outlined in this guidebook can be used equally successfully with the largest of investment portfolios or with as little as 100 shares of an Exchange Traded Fund or individual stock.

The program provided in this book to assist you in achieving double-digit compounded annual returns might be more conservative or more aggressive than your current investment approaches. Suffice it to say for now that the program involves more risk than placing your money in an FDIC insured bank, but less risk than simply being invested in the stock market. If you are willing to take some risk to significantly increase your retirement income, but not as much risk as just being in the stock market alone, then this book is for you. By using the tools in this guidebook, you will have a viable means of working towards this worthwhile objective.

 *  *  *  *  *
Copyright 2022
Arrow Publications


email me