Financial planning

Client X has $ 1 million cash 55 years old, married, 2 children both grown up and financially independent Decided to retire next month Would need at least $5,000 a month to cover rent, medical insurance, spending money etc. Create a suitable diversified all weather portfolio of dividend paying stocks and bonds (ETFs) and if necessary, commodities. Assume a 15% income tax rate Actionable plan (ETFs, stocks, bonds, but not non traded indices) Diversification. Treasury bonds balanced with equity (diversified ETFs) For bonds, remember coupon <> yield when price <> $100 Annual income= coupon*par value (non $ invested) Or=yield*amount invested Tax consideration or tax empty municipal bond Past return is no guaranteed for future return -Not completely useless; quantify volatility but be careful of regime change -Stock volatility need to be calculated differently when it is part of a portfolioFilter Criteria A long history of continuous dividend payments A dividend yield of at least 3% Greater earnings per share than dividends per share (EPS>DPS) A dividend payout ratio of less than 80% A worldwide market presence, as a hedge against inflationCriteria Bond -At least 10 years to maturity -Only chose Fitch rating is AAA -Coupon rate is above 5% and yield is above 4% Equity -The dividend received in 2015 is -15 +15% in range of average dividend in past five years -It is a profitable company, EPS>20 -P/E ratio is under 20 -Stock price is not in the peak stage comparing to historical price -The risk grade of chosen company is lower than S&P 500