You Can Retire NOW with Just 5 Stocks

A new study shows Social Security will implode without a 22% cut to benefits, creating a retirement gap of up to half a million dollars for some families. I'll show you five stocks that can replace that income with just 178,000 and at the same time lower your risk of running out of money. Hey, Bow Tai Nation, Joseph Hog here with your weekly stock market update before the week starts with the stocks to watch and the stock market news you need to see. Stick around after those retirement stocks and I'll also update you on a huge week of earnings for advanced micro devices ticker AMD, Soundhound AI, and Symbotic. But folks, we need to talk about this. Social Security isn't going away, but your benefits will not be what you expect. A new study shows the retirement trust fund will run dry in 2032, less than 6 years from now, and after that, we'll have to make a 22% cut to your retirement benefits. And of course, that always comes with the disclaimer that that's if Congress does nothing. But honestly, we need to just stop assuming that Washington is going to get off its ass and fix this because no politician wants to make that hard choice when they can just ignore the problem. The result, a study by Health View Services shows the average couple will lose upwards of $200,000 in retirement benefits from those forced cuts. And high earning couples will lose more than a half a million. Now, your retirement benefits depend on how much you made leading up to Social Security. Those making over 160,000 a year max out at about $41,000 in benefits or about $3,400 a month. While average earners with an income around $60,000 going to receive about 25,000 a year or $2,100 a month. So taking a 22% haircut on that $2,100 would mean only receiving $1,640 a month in retirement. Now, can you live off $1,600 a month? It might be possible if you like ramen noodles three times a day, but your golden years going to feel like a lead weight. That study also highlights how much you would have to invest to cover the gap. Roughly $54,000 for the average couple and 130,000 for high earners. Now, that is an additional investment to fill that gap beyond what you're already saving. But I found five stocks that will not only cover the gap, but can completely replace social security with just $178,000 invested. And better still, these five stocks lower your risk of running out of money in retirement. As important as those five stocks is the concept of risk matching in investing. The idea is that you invest in the companies profiting off your biggest risks or expenses. So, as your budget gets blown out by medical bills, you make more money on your investments to offset that financial pain. Putting that idea of risk matching to work means looking at what your budget is going to look like in retirement using the government's consumer expenditure survey. An ongoing study of everything you buy from the your ab roller to that Virgin Mary grilled cheese. Folks, big brother is watching. Now, I've summarized this down to the big ticket categories, but the first thing you notice looking at the data is that that hole in your budget starts growing the minute you tell your boss to shove it. And for most retirees, income drops to zero without social security. The good news is that expenses tend to drop in most categories as well, though that might be a lot of forced budgeting. You can't spend what you just don't have. Spending on food, housing, and entertainment all falls. But the glaring difference here is in healthcare, where costs jump almost immediately. Overall health care costs jump 15% in the first 10 years after 65 and are up 18% after 75 compared to pre-retirement. Can you cover an extra $1,200 expense each month, even as those retirement benefits you count on are cut by 22%. You will by investing in the stocks that profit from those higher expenses. We start here with United Health Group, ticker UNH, one of the nation's largest Medicare insurers, with the shares up 66% over the last year. Health insurance is the largest expense for most retirees, making up 2/3 of their total health care expenses and with costs jumping 18% for those 65 and older. United Health benefits through its insurance, Medicare Advantage, and its Optimum Healthcare platform. Besides the 2.2% dividend, the stock has produced a 14% annualized return over the last 20 years. That's not cherry-picking a few good years. That is two decades of proven returns. Prescription drug costs climbed steadily with age and by the time you reach 75 are up 20% on average. Eli Liy, ticker LLY, is a leader in diabetes, obesity, Alzheimer's, and other chronic disease treatments. The company has one of the deepest pipelines of blockbuster drugs and the financial firepower to invest in research. All of this contributing to a 20% annualized return over 20 years. And one of the largest on our list, $600 billion giant Johnson and Johnson, ticker J&J, gives your portfolio that broad exposure to aging risks through both innovative pharmaceuticals and its medtech division, which includes surgical equipment, orthopedic implants, and cardiovascular devices. The stock, which has produced an 11% annual return, also pays a 2% dividend that has been increased every year for 60 straight years, putting more money in your pocket when you need it most. A medical supplies are one of your fastest growing expenses in retirement with spending rising 46% compared to households around the age of 55. Beckton Dickinson and company took her BDX supplies hospitals and clinics with those essential products from syringes and IV systems to diagnostic equipment, creating a steady recession resistant business that has grown the stock by 9% a year for two decades. Housing can be a stealth killer in your budget. And as we live longer, demand for senior housing, assisted living, and outpatient medical is going to continue to grow. That's where Welltowwer, ticker WL, comes in. With a portfolio of 2500 properties in senior living and wellness housing, the stock has returned a 15% annual rate for two decades with continued upside on that housing demand. Nation just these five stocks with an average 14% annual return. That's enough to produce a $25,000 income from just $178,000 invested, completely replacing what most retirees receive from Social Security. That way, no matter what happens to SSI, you're going to still have that peace of mind that you need in retirement. I'm going to reveal the stocks I'm watching this week and the stock market news you need to see. But first, if you haven't yet, use the special invite link below to join me on the Blossom Investing app and see every stock in my portfolio. It's totally free to use and help support this channel. So, I appreciate that. Plus, you're going to get to see what over 500,000 investors are talking about in the social feed. So, look for that link below or just scan the QR code here. On to those stocks I'm watching this week and a huge week for earnings. Advanced Micro Devices ticker AMD starts us off with earnings on Tuesday. The stock is basically flat since the giant move in May. Analysts are forecasting an equally giant 47% growth in revenue over this quarter and 35% for this coming quarter. Both bars that are becoming increasingly hard to clear. The CEO Lisa Sue has done a great job of boosting profitability with earnings expected up 78% this year to $745 per share. But I got to wonder if this one is just getting close to wearing out its welcome. Even on that earnings bonanza, the stock still trades for a price of 64 times this year's earnings. Very expensive by any measure. Management generally beats its forecast, but hasn't always been able to give investors enough. The stock fell 17% on the fourth quarter report while jumping 18% during the most recent earnings. The market is only pricing in a 5% move on this quarter's report, which given history, I think is underestimating the risk here. It is a good company and we made a lot of money investing in it last year, but right now just too expensive and too much risk. Soundhound AI, ticker sun, is also going to be reporting its earnings on Wednesday with the stock given up for dead by Wall Street, down 38% this year to almost $6 a share. Management has missed forecast in the last two quarters. So, I understand the pessimism, but this is still a company expected to grow revenue by 37% this year and is at the forefront of the AI assistant market. This is an early use case for AI, but I believe has an advantage in its beachtome model that is going to grab market share. It's a $140 billion plus market, but still in its infancy, so investors do need that patience to let the stock grow after taking profits in January at around $20 a share. I bought back in just under $9 a share, and I'm going to hold back up to that $20 peak. Shares have been hit hard during the last three earnings report down almost 8% of the first quarter reports. So expect that volatility but hold on for the long term. Symbotic ticker SYM reports on Wednesday as well. And another stock well off its peak of around $70 a share to start the year. While the surprise upside might be higher on Sound. Symbotic is in a far better financial position and the less stressful investment of the two. This company is revolutionizing logistics from inventory to storage design and distribution. All of which is powered by next generation robotics and AI. Partnerships with Walmart and SoftBank have helped it grow a $22 billion backlog that keeps that revenue growing. Growth of 25% expected this year is forecasted to accelerate to 28% next year. This one is already profitable in earnings and free cash flow. I've held on for the last couple of years, still up 71% from $25 a share when nobody was talking about this one, and I'm going to continue to hold back up to past $70 each. This is a long-term hold, but the potential is there for a big earning surprise. Shares were up 40% in the last year's Q4 report, though they have also been down in two of the last four quarters. Updating our stock market outlook, I was right that the Fed was going to hold off on rate increases last week, but that hasn't stopped the interest rates and the bond market from going apeshit crazy. This isn't something we talk about much here on the channel because, frankly, it puts most investors to sleep. But the 10-year Treasury has jumped more than half a percent this year to a three-year high at 4.75%. Interest rates are up across the curve. The 5-year and 30-year are both up almost 8% over the last month. And while increases of half a percent might not seem like much against stocks that can move 20% in a day. That half a percent increase represents another $200 billion in interest on government debt each year. And the housing market frozen at rates too high to afford. if it doesn't let up by the end of earning season in a few weeks, this is going to start hitting investor sentiment and stocks will fall. Now, I say after earnings because with this kind of profit growth being reported right now, nothing short of the second coming is going to bring a drop in stocks. Companies in the S&P 500 are reporting 47% earnings growth for the second quarter. And to give you some kind of perspective on how unbelievably high that is, the last two years have seen a profit bonanza for companies at 15% growth. That's not even close to what we're seeing right now. In fact, you have to go back to 2021 when the government was pumping out trillions of dollars in pandemic stimulus at a 0% interest rates to see anything like this. That earnings growth is lifting investor mood and making stocks look very, very cheap. The price of the S&P 500 at 7500 is now just 19 times the earnings analysts expect companies to report over the next year. That is below the 5-year average around 20 times PE ratio, only slightly above the 10-year average. Stocks have only been this cheap compared to their earnings a few times over the past 5 years. So, that is keeping stocks heading higher. But again, if interest rates don't come down over the next few weeks, they're going to change the mood on both Wall Street and Main Street. We'll see the allimportant jobs report on Friday expected to show the US added 85,000 jobs last month after a crushingly low 57,000 jobs the month before. Now, that weak jobs market combined with higher borrowing costs is going to bring the narrative back to the economy, and it won't be a happy ending. Like I said, I think we're safe for at least the next couple of weeks as those earnings continue to surprise higher. But don't sit on this bull market too long before looking for some of those safety stocks for protection. Join me on the Blossom Investing app free with a special invite link in the description below. Don't forget to join the Let's Talk Money community by tapping that subscribe button and clicking the bell notification.