Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Here Is How You Can Supplement Social Security


Photo Credit: Kinder Morgan

There is a growing worry among Americans that Social Security won't be there when they retire. And even if it is there, many more worry that it still won't be enough to make ends meet. That's why you need to start thinking of ways to supplement your Social Security, with Master Limited Partnerships, or MLPs, being a real solid option to consider.

Investing in MLPs like BreitBurn Energy Partners (NASDAQ: BBEP  ) , Enterprise Products Partners (NYSE: EPD  ) , or Kinder Morgan Energy Partners (NYSE: KMP  )  would make a solid supplement to Social Security. Each owns stable, boring assets. BreitBurn Energy Partners, for example, owns thousands of mature oil and gas wells across the U.S. Meanwhile, Enterprise Products Partners and Kinder Morgan Energy Partners own tens of thousands of miles of energy pipelines as well as processing plants and storage facilities.

These boring assets, however, produce a lot of excess cash flow. A majority of that cash flow is yours to keep thanks to a special tax advantage these companies have been given by the IRS. It's that advantage that allows these companies to pay large distributions to their investors, which can go a long way in supplementing Social Security.

I've created the slideshow below to help you learn more about the current Social Security worries, as well as a bit more about BreitBurn Energy Partners, Enterprise Products Partners, and Kinder Morgan Energy Partners. You can then follow that up by checking out our special free report on Master Limited Partnerships. These are investments so powerful that even the IRS is daring you to make this investment. 

Read/Post Comments (5) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 19, 2014, at 9:19 AM, wjcoffman wrote:

    But aren't MLPs a pain when it comes to filling out your tax return? Maybe hold the MLPs in a ROTH IRA?

  • Report this Comment On May 19, 2014, at 9:20 AM, zorro6204 wrote:

    Well . . . not the IRS, Congress carved out the exception in IRC 7704(c). The IRS, aside from a relatively minor rule making function, just administers tax reporting and collection.

  • Report this Comment On May 20, 2014, at 9:37 AM, TMFmd19 wrote:

    @wjcoffman - Well taxes in general can be a pain for some as it is. There are other options (and a slideshow is forthcoming) on MLP type stocks to own in place of MLPs. For example, General Partners like Kinder Morgan (KMI - which I personally am invested in) could be bought instead of the MLP. Less income but less tax headaches.

    @Zorro6204 - Yeah, that really just has more to do with the theme of our new video. People associate the IRS with paying their taxes.


  • Report this Comment On May 21, 2014, at 9:14 AM, zorro6204 wrote:

    Yes, but it's our job to educate the people. And that should be done well, like all things. Women and children can be careless, men should be accurate.

  • Report this Comment On May 22, 2014, at 2:30 AM, Acorn17 wrote:

    One thing to think about though is that MLPs create taxable income in MANY states. While holding a few thousand dollars of an MLP such as EPD renders trivial amounts per state (which most people ignore -- say $2 or $3 each), if you were going to supplement Social security by say holding 100k+ of these investments, you could well trigger having to files state tax returns in many places. Whereas a state may look the other way for $2 here or there, when it comes to 100's of dollars, you might get a surprise and you could have to file returns in 20 states which would be annoying to say the least. I think your upcoming writeup of 'MLP like' companies would be a good complement to MLPs to hold enough to be useful but not eat up large amounts of the gains by filing state tax returns all over the place. I maybe over-stating this somewhat, but state taxes do factor in here.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2962428, ~/Articles/ArticleHandler.aspx, 9/2/2015 3:18:54 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Matt DiLallo

Matthew is a Senior Energy and Materials Specialist with The Motley Fool. He graduated from the Liberty University with a degree in Biblical Studies and a Masters of Business Administration. You can follow him on Twitter for the latest news and analysis of the energy and materials industries:

Today's Market

updated Moments ago Sponsored by:
DOW 16,272.14 213.79 1.33%
S&P 500 1,936.01 22.16 1.16%
NASD 4,712.49 76.39 1.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/2/2015 3:03 PM
BBEP $2.71 Up +0.05 +1.88%
BreitBurn Energy P… CAPS Rating: ****
EPD $27.59 Up +0.10 +0.35%
Enterprise Product… CAPS Rating: *****
KMP $0.00 Down +0.00 +0.00%
Kinder Morgan Ener… CAPS Rating: *****