Dividend-paying Stocks Are Helping Retirees Live Life of Luxury

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Some retirees are enjoying a life of luxury thanks to investing in dividend-paying stocks, mutual funds, or ETFs, writes Jen Glantz for the Business Insider.

Over time, the cash generated from distributions of stocks or cash to shareholders can supplement your income when you retire. Depending on how much money you invested in those stocks or funds, their growth, and how much of the dividends you decide to reinvest, you could be generating enough funds annually to live off without needing any other retirement plan.

However if you decide to invest in dividend-paying stocks it is necessary to research the best ones for you.

“To pick the right stocks, I need to spend time researching companies that meet my criteria, which include long-term profitability, solid cash flow, and a track record of dividend payouts from years prior,” wrote Glantz.

Next, you need to decide how much of your retirement will consist of dividend payments. The percentage depends on your other retirement options, but it can be as high or as low as you want it to be.

You also need to budget an amount you want to invest quarterly into more dividend-paying stocks and funds.

Frederick Hubler, CEO and Chief Wealth Strategist for Creative Capital Wealth Management Group, states, “In retirement, income is king. I like to complement the dividend income of public companies with sources of income that are from private and less volatile sources. These tend to also be less liquid but the income created is more than once can get from just using dividends alone.”

Finally, you need to decide how much of your dividends to take out and reinvest into buying more stock. This way, the cash amount you have in that stock or fund can continue to grow over time.

Read more about dividend-paying stocks in the Business Insider.


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