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Retirement Income Idea

As some of my friend ask how to plan for retirement? i think the key is reliable, risk not high and have monthly income. Therefore, I choose a preferred shares ETF as reference. 


PFF - https://www.ishares.com/us/literature/fact-sheet/pff-ishares-preferred-and-income-securities-etf-fund-fact-sheet-en-us.pdf

this is the factsheet including all the explanation of this ETF. 

If you want to check the monthly payment , you can access it here:

https://finance.yahoo.com/quote/PFF/history/?guccounter=1&guce_referrer=aHR0cHM6Ly9sb2dpbi55YWhvby5jb20v&guce_referrer_sig=AQAAAH7pTPTt3gpxmfy4M4rd8CjpRmzIJZxGC7jz_zEPTOZUESlxVT9d4k2VNVXytDb47NGPyNx13Koz461VtqDo2lBJCCjQi19Q5ljcHnH4dUSzHUg58mlv91udDE9ikh0vSy6AFliUYjCj97yVtsqgHxSaJpx5aTkVJHx6uG1p2X-2&frequency=1mo&period1=1643673600&period2=1752219980

Then let's do the calculation , for instance. if I start now and continue to average purchase for one year plus the initial principle. how it will be ?
By proofing the logic , i have to go back to 2023 and try to start as an example 

I wish it can help you. my friend.

Step 1: Investment Breakdown
  • Initial Investment: $60,000 in January 2023.
  • Monthly Investments: $5,000 × 31 months (January 15, 2023, to July 15, 2025) = $155,000.
  • Total Invested: $60,000 + $155,000 = $215,000.
  • Holding Period: January 2023 to July 11, 2025 (~2.5 years, or 30 months for most calculations, with the final investment on July 15, 2025, valued at the July 11 price).
  • Assumptions:
    • Dividends are reinvested monthly at the average share price for the respective year.
    • No transaction fees or taxes are included.
    • Share purchases use average monthly or yearly prices from the provided data when exact prices for the 15th are unavailable.
Step 2: Gather PFF Price and Dividend DataFrom the provided financial data:
  • Price Data:
    • 2023 Yearly Average: $31.63.
    • 2024 Yearly Average: Not explicitly provided, but monthly data shows prices like $31.44 (December 2024) and a 1-year range of $28.70 (April 2025) to $33.59 (September 2024). I’ll estimate an average of $31.50 for 2024 based on the trend.
    • 2025 (to July 11): Current price is $31.36. Monthly data shows $30.68 (June 13, 2025) and $31.36 (July 11, 2025). I’ll use $31.00 as the average for 2025 purchases.
    • July 11, 2025 Price: $31.36 for final valuation.
  • Dividend Data:
    • Dividend yield as of June 2025: 6.58%, with $2.04 per share paid over the past year (~$0.17 per share monthly, based on 12 × $0.17 = $2.04).
    • Assume a consistent monthly dividend of $0.17 per share for 2023–2025, based on a ~6.5% yield on an average price of ~$31.50.
  • Total Return Data (for cross-checking):
    • 2023: 9.20%.
    • 2024: 7.24%.
    • 2025 YTD (to June 2025): -0.85%, but we’ll adjust to July 11 using the price change and dividends.
Step 3: Calculate Shares Purchased
  • Initial Investment (January 2023):
    • $60,000 ÷ $31.63 = ~1,896.30 shares.
  • Monthly Investments:
    • 2023 (12 months, January 15 to December 15):
      • $5,000 ÷ $31.63 = ~158.01 shares per month.
      • 12 × 158.01 = ~1,896.12 shares.
    • 2024 (12 months, January 15 to December 15):
      • Use average price of $31.50.
      • $5,000 ÷ $31.50 = ~158.73 shares per month.
      • 12 × 158.73 = ~1,904.76 shares.
    • 2025 (7 months, January 15 to July 15):
      • Use average price of $31.00.
      • $5,000 ÷ $31.00 = ~161.29 shares per month.
      • 7 × 161.29 = ~1,129.03 shares.
  • Total Shares from Contributions:
    • 1,896.30 (initial) + 1,896.12 (2023) + 1,904.76 (2024) + 1,129.03 (2025) = ~6,826.21 shares.
Step 4: Account for Dividends and ReinvestmentPFF pays monthly dividends, reinvested to buy additional shares. Using $0.17 per share monthly:
  • Dividend Calculation:
    • Initial Shares (1,896.30, January 2023):
      • Held for 30 months (January 2023 to July 2025): 30 × $0.17 × 1,896.30 = ~$9,675.93.
    • 2023 Monthly Shares (158.01 per month):
      • January: 30 months × $0.17 × 158.01 = ~$805.85.
      • February: 29 months × $0.17 × 158.01 = ~$779.05.
      • March: 28 months × $0.17 × 158.01 = ~$752.25.
      • April: 27 months × $0.17 × 158.01 = ~$725.45.
      • May: 26 months × $0.17 × 158.01 = ~$698.64.
      • June: 25 months × $0.17 × 158.01 = ~$671.84.
      • July: 24 months × $0.17 × 158.01 = ~$645.04.
      • August: 23 months × $0.17 × 158.01 = ~$618.24.
      • September: 22 months × $0.17 × 158.01 = ~$591.44.
      • October: 21 months × $0.17 × 158.01 = ~$564.64.
      • November: 20 months × $0.17 × 158.01 = ~$537.83.
      • December: 19 months × $0.17 × 158.01 = ~$511.03.
      • Total 2023 dividends: ~$7,282.27.
    • 2024 Monthly Shares (158.73 per month):
      • January: 18 months × $0.17 × 158.73 = ~$485.71.
      • February: 17 months × $0.17 × 158.73 = ~$458.83.
      • March: 16 months × $0.17 × 158.73 = ~$431.94.
      • April: 15 months × $0.17 × 158.73 = ~$405.06.
      • May: 14 months × $0.17 × 158.73 = ~$378.18.
      • June: 13 months × $0.17 × 158.73 = ~$351.30.
      • July: 12 months × $0.17 × 158.73 = ~$324.41.
      • August: 11 months × $0.17 × 158.73 = ~$297.53.
      • September: 10 months × $0.17 × 158.73 = ~$270.64.
      • October: 9 months × $0.17 × 158.73 = ~$243.76.
      • November: 8 months × $0.17 × 158.73 = ~$216.88.
      • December: 7 months × $0.17 × 158.73 = ~$190.00.
      • Total 2024 dividends: ~$3,554.24.
    • 2025 Monthly Shares (161.29 per month):
      • January: 6 months × $0.17 × 161.29 = ~$164.52.
      • February: 5 months × $0.17 × 161.29 = ~$137.10.
      • March: 4 months × $0.17 × 161.29 = ~$109.68.
      • April: 3 months × $0.17 × 161.29 = ~$82.26.
      • May: 2 months × $0.17 × 161.29 = ~$54.84.
      • June: 1 month × $0.17 × 161.29 = ~$27.42.
      • July: 0 months (no dividends yet) = $0.
      • Total 2025 dividends: ~$575.82.
    • Total Dividends: $9,675.93 + $7,282.27 + $3,554.24 + $575.82 = ~$21,088.26.
  • Reinvested Shares:
    • Assume dividends are reinvested at an average price of $31.30 (blending 2023: $31.63, 2024: $31.50, 2025: $31.00).
    • $21,088.26 ÷ $31.30 = ~673.74 additional shares.
  • Total Shares by July 2025:
    • 6,826.21 (contributions) + 673.74 (dividends) = ~7,499.95 shares.
Step 5: Calculate Final Value
  • Share Price on July 11, 2025: $31.36 (per provided data).
  • Total Value: 7,499.95 × $31.36 = ~$235,199.12.
Step 6: Cross-Check with Total ReturnUsing the total return approach for the $215,000 invested:
  • 2023: $60,000 initial + $5,000 × 12 = $120,000 invested, with a 9.20% return.
    • Approximate weighted return (since investments are spread): $120,000 × (1 + 0.092 × 0.5) ≈ $125,520 (assuming half-year average holding).
  • 2024: $125,520 + $5,000 × 12 = $185,520 total invested, with a 7.24% return.
    • $185,520 × (1 + 0.0724 × 0.5) ≈ $192,237.55.
  • 2025: $192,237.55 + $5,000 × 7 = $227,237.55, with a ~3.55% return (price change from $31.44 to $31.36 = -0.25% + 6.5% × 7/12 dividends ≈ 3.55%).
    • $227,237.55 × (1 + 0.0355 × 0.5) ≈ $231,273.58.
The total return method yields ~$231,273.58, slightly lower than the share-based calculation ($235,199.12). The share-based approach is likely more accurate given the specific investment schedule and dividend reinvestment.Basically after this investment period, you will have 7500 shares of PFF and if 0.17 dividend for each month you will collect USD1275.00 per month based on current information.To give you more idea , i have create a seasonal effect analysis of this PFF. Based on past years statistic, the best time to buy is Monday, and Oct each year. Good luck!


Final AnswerYour investment in PFF, with a $60,000 initial investment in January 2023 and $5,000 monthly investments from January 15, 2023, to July 15, 2025 (totaling $215,000), would be worth approximately $235,199.12 as of July 11, 2025, assuming dividends are reinvested monthly and using the provided price ($31.36) and dividend data. For exact results, verify with your brokerage for precise purchase prices and dividend reinvestment details.Note: The provided financial data was critical for price and dividend estimates.

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