Living off dividends can be a great retirement income strategy. In this video you will learn what a realistic dividend income stream looks like. I show an example dividend income portfolio and investments that have historically paid good dividends with growth of the dividend and principal. However, there are some obstacles to using an all dividend retirement income strategy. First, you need to save a lot more money to retire off dividends. The dividend yield on stocks is not very high. Often people get into trouble using investments with high dividend yields. High dividend yields often result in poor long term performance. Second, you need to use an all-equity portfolio and not many people can tolerate the volatility associated with an all-equity portfolio. Learn more: …(read more)

HOW TO: Hedge Against Inflation

REVEALED: Best Investment During Inflation

HOW TO INVEST IN GOLD: Gold IRA Investing

HOW TO INVEST IN SILVER: Silver IRA Investing

As retirement approaches, many people wonder how much money they really need in order to retire comfortably. While there are various factors to consider, one popular strategy is to retire off dividends. But how much money do you really need to make this a feasible option?

Ethan S. Braid, a Certified Financial Analyst (CFA), sheds some light on this topic. According to Braid, the amount of money you need to retire off dividends depends on a few key factors. These include your desired annual income in retirement, the yield of the investments in your portfolio, and the volatility of those investments.

Braid explains that in order to retire off dividends, you need to have a well-diversified portfolio of dividend-paying stocks or funds. These investments should have a consistent track record of paying dividends and increasing those dividends over time. Ideally, you want to have a portfolio that can generate enough income to cover your expenses in retirement without having to dip into the principal.

Braid also emphasizes the importance of understanding the yield of your investments. The yield is the annual income generated by your investments as a percentage of their total value. For example, if you have a portfolio of $1 million that generates $30,000 in annual dividends, your yield is 3%.

In terms of how much money you need to retire off dividends, Braid suggests aiming for a yield of at least 3-4% in order to generate enough income to cover your expenses. This means that if you want to generate $50,000 in annual income in retirement, you would need a portfolio of around $1.25-1.67 million (assuming a 4% yield).

However, Braid notes that it’s important to consider the volatility of your investments as well. Higher yielding investments tend to be riskier and more volatile, which could impact your ability to generate a consistent income in retirement. So it’s crucial to strike a balance between yield and risk in your portfolio.

In conclusion, while there is no one-size-fits-all answer to how much money you need to retire off dividends, Braid provides valuable insights into the key factors to consider. By aiming for a portfolio with a yield of 3-4% and carefully managing the risk of your investments, you can set yourself up for a comfortable retirement off dividends.