In this valuable video I tell you what retirement is like for people who own dividend stocks versus those that don’t.
0:00 Intro
0:28 Census Report on Income Sources for Older Households
0:39 Household Income Deciles
1:34 Who is in those (retiree) households
1:54 6 Main Sources of (retiree) Income
6:40 What should an average 40-yr-old do that has never invested?
7:33 Quality Dividend stocks (perhaps Aristocrats & Kings)
8:14 Simple 3-Step Plan to get Wealthy/Rich
8:31 Why Dividend Passive Income is Ideal for Retirement
9:06 Median Retirement Accounts by Age
9:40 Example Div Portfolio to have about the pension/retirement acct that 65+ folks have
10:08 TLDR
10:25 Average Annual Spending of Retirees
10:34 Median Retirement Deferral rates
10:57 Retirement Calculators
11:08 More Benefits of Retiring with Dividends
11:35 Retiring without Dividends using the 4% Rule
12:32 Shoutouts/Outro
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Retirement with Dividends vs Without: Securing Your Financial Future
Retirement planning can be a daunting task, filled with endless variables and uncertainties. One of the crucial decisions retirees face is whether to rely solely on their savings or explore additional sources of income, such as dividend investments. Dividends are regular payments made by companies to their shareholders, offering a stable stream of passive income. In this article, we will discuss the advantages and considerations of retirement with dividends versus retirement without dividends.
When planning for retirement, individuals often emphasize building a sizable nest egg through savings and investments. While saving is undoubtedly important, it may not provide the level of financial security needed to sustain a comfortable retirement. This is where dividends come into play. Companies that distribute dividends do so from their earnings, giving shareholders an opportunity to benefit from the company’s success. Dividend-paying stocks can provide retirees with an additional income stream that can significantly enhance their standard of living during retirement.
One of the primary advantages of retirement with dividends is the certainty and predictability of income. Unlike other investment strategies, dividend payments are relatively stable and paid on a regular basis. This consistency allows retirees to plan their finances more effectively, ensuring that their essential needs and unforeseen expenses are adequately covered. Furthermore, unlike other investments that rely on market fluctuations for income, dividends are less susceptible to market volatility, thereby offering retirees a more reliable source of income.
Another key benefit of dividends is their potential for growth over time. As retirement can last several decades, it is essential to plan for inflation and increasing expenses. Dividend payments tend to grow over time, as companies increase their profits and, consequently, their distributions to shareholders. This growth can help retirees stay ahead of inflation and maintain their purchasing power, making dividends an attractive option for long-term financial security.
However, it is important to consider some potential drawbacks and risks associated with retirement with dividends. Investing in dividend-paying stocks requires careful research and consideration. While some companies have a long history of consistent and increasing dividends, others may have unstable or inconsistent payouts. Therefore, retirees must conduct due diligence to identify stable and reliable dividend stocks that align with their financial goals and risk tolerance.
Additionally, dividend income is subject to taxation. Depending on the country and tax regulations, dividends may be taxed at a different rate than other forms of income. Retirees should consult with a financial advisor or tax professional to understand the implications of dividend income on their overall tax obligations.
Lastly, retirees who heavily depend on dividends must be aware of the potential risks associated with individual companies. If a company experiences financial difficulties or cuts its dividend, it can significantly impact a retiree’s income stream. Diversification is crucial to mitigate this risk. By investing in a diversified portfolio of dividend-paying stocks across various sectors and industries, retirees can minimize the impact of any single company’s performance on their overall income.
In conclusion, retirement with dividends offers retirees the advantage of a stable and predictable income stream along with the potential for growth over time. The certainty provided by dividends can enhance financial planning and provide retirees with peace of mind. However, it is crucial to carefully select dividend paying stocks and diversify investments to mitigate risks. By understanding the benefits and considerations associated with retirement with dividends, individuals can make informed decisions that lead to a secure and fulfilling retirement.
In this valuable video I tell you what retirement is like for people who own dividend stocks versus those that don’t.
0:00 Intro
0:28 Census Report on Income Sources for Older Households
0:39 Household Income Deciles
1:34 Who is in those (retiree) households
1:54 6 Main Sources of (retiree) Income
6:40 What should an average 40-yr-old do that has never invested?
7:33 Quality Dividend stocks (perhaps Aristocrats & Kings)
8:14 Simple 3-Step Plan to get Wealthy/Rich
8:31 Why Dividend Passive Income is Ideal for Retirement
9:06 Median Retirement Accounts by Age
9:40 Example Div Portfolio to have about the pension/retirement acct that 65+ folks have
10:08 TLDR
10:25 Average Annual Spending of Retirees
10:34 Median Retirement Deferral rates
10:57 Retirement Calculators
11:08 More Benefits of Retiring with Dividends
11:35 Retiring without Dividends using the 4% Rule
12:32 Shoutouts/Outro
My Seeking Alpha Premium Affiliate Link ➜ https://www.sahg6dtr.com/2352ZCK/R74QP/
Chat with me on my free Dividend Discord chat server ➜ https://discord.gg/kkSr5FY
Follow me on Instagram ➜ https://www.instagram.com/genexdividendinvestor/
Follow me on Twitter ➜ https://twitter.com/GenExDividend
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My Dividend Merch (10% donated to St Jude) ➜ https://teespring.com/stores/genexdividendinvestor
Donate to St. Jude’s Children Hospital: https://www.stjude.org/donate/donate-to-st-jude.html?sc_icid=header-btn-donate-now
An Estimate of My Dividend Portfolio on M1 ➜ https://m1.finance/g_gwV-4Pk5sm
Please use my Amazon Affiliates Link ➜ https://amzn.to/2YLxsiW
Thanks! As an Amazon Associate I earn from qualifying purchases.
Please LIKE, COMMENT and SUBSCRIBE to support this channel – it helps me immensely! Also, please SHARE this video with your friends 🙂 Thanks, I really appreciate it!
Excellent information.
I think im just going to put it all on SCHD and call it a day
If you take SSI it eill affext your Medicare and Medicaid . So sometimes its better to take less money from the pension so you get free healthcare .
Very educational!
Great video
Accurate information.
Do you think SCHD will be safe for life
Question: I’m a dividend growth investor that strongly prefers ETFs to minimize risk. I’m building a cash flow portfolio based long term around SCHD. Side positions in VIG, FXAIX, HDV, & CDL. i’m in my early 30s. Expense Ratios. Do expense ratios only matter if you plan on selling 4:03 ? if you buy with the intention to never sell, your cash flow in retirement doesn’t change based on the expense ratio if you are in funds with .06 or .50 for example. Only the cash flow characteristics of the base funds, correct? Total return has significance, however, if never planning to sell…..
Amazing how much is paid in Social Security benefits based on your charts. A recent GAO report stating Medicare payments to recipients will be insolvent by 2031 and Social Security by 2033 is a bit scary to me. How will these charts look 10 years from now? With more people receiving benefits than people are putting in seems like this should be more a concern.
If this holds true having other sources of income for retirement.
Another excellent video from the X Files. Thanks for your insights.
Punch in VGT in the ETF reinvesting calculator and tell me why you would do any other ETF.
No doubt your knowledge and ability to convey such valuable information will enable young investors to be successful. Keep up the great work!
Currently making $450/month on average. Goal is to have the ability to retire by 35 (currently 27 yrs old)
The thing to me is, if you invest and have other income outside of dividends then you will be able to live off dividends without selling. Which means you can pass that on to your kids which will give them a leg up in life. $52k dividends received in 2022.
Great video
Started intentional dividend investing 8/22 and already up to $2,700 in dividends yearly. 🙂
Never had a job where my boss would increase my pay by 200 or 300 dollars every quarter love dividends
What are your thoughts of having a decent amount (5%-10%) invested in an index fund (VFIAX in a Roth) for someone in their early 20s? You have helped me start my dividend investing journey, and I love your videos! Thank you for everything you do!
I literally love ur vids I’ve watched them all ur story inspires me to get to ur level one day 🙂 thank u alot
Is there a tax advantaged strategic approach to transfer pre-tax 401k funds to dividend stocks?
excellent video and thanks for your hard work in making these very good videos
Dividends are the way to go. Capital appreciation is great for ego. But steadily increasing cash flow is a significant contributor to financial and mental wellbeing
I’m a tradesman in Canada age 25! I’ve worked with 64 yr old man completely out of shape trying to max out their cpp for age 65 because they lost there entire 30 year pension at a previous job no I appreciate these videos because I will not make the same mistake of putting all my eggs in the same basket
I've adopted a purely dividend growth strategy with a 30 year time horizon, because of your fantastic content. Thank you forever