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How retirees can prosper from preferred stocks Preferred stocks are good candidates for retirees' investment portfolio, as these stocks provide regular income that are bigger than the interest payments from a corporate bond, according to this article on Kiplinger. Preferreds issued by investment-grade companies yield at least 5%, higher than the 3% yield offered by investment-grade corporate bonds. Preferred yields are also considered dividend income that is taxed at capital gains rate, which could be zero for investors in the lowest tax bracket. "Preferreds are one of the very few places where you can still get a reasonable income stream by historical standards," says an expert.
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