If you’re like most people, you’ve spent your adult life, how much work, if you’re smart, save some money and invest what you do is.
In this “accumulation phase,” you build wealth and resources to provide a source of retirement income for themselves. You see your portfolio grow, but you do not dig into it.
But now the change is coming. You retire. And when you want your portfolio to continue to provide returns, you also want it to use your income to the cost of your day-to-day and live your dream lifestyle.
If you have a job consultant, he probably talked to you about this “assignment phase”, and has been helping you prepare for it.
And more, should have been about moving to A S AFER investment strategy in order to protect the money that you worked so hard to save the conversation.
Why the dividend is attractive to retirees
If you have not already, this is a good time to think about dividend investment as part of the plan – to build a strong stock dividend money generated collection rate of return throughout the year.
If you own stock, you know it up and down on a daily basis. Changes in the price paid for it any time people wish; you hope it will continue to rise, but that is not always the case.
However, if it is the company paying the dividend, it will pay you deposited into your brokerage or bank account in cash. You get paid to hold the stock.
At the time, and you are looking for safe stocks from your portfolio SECURIT Y, payment of dividends can be a good investment. Beyond dividend history, in the long term other investments, there are quite a bit less volatility. This is good to know that if you need to take a 4% withdrawal from your portfolio, 3% or 4% will come from dividends, so you do not have to put all hope in a changing market.
You know that your portfolio will pay you to have it.
What should be noted
However, dividend-paying stocks you have to be careful when shopping. You can not just pick high dividend paying stocks. Do a little homework. The company is healthy? It isLee can figure? There are some companies out there, pay a high dividend yield, but they are losing money. They use the money to pay for these DIV idends can come from borrowed funds came when a company is not a healthy economy, still paying high dividends, you see the risk of the stock drops to a point where it may not be recoverable, or at best, it slow recovery.
The company agreed to pay dividends, and increase its dividend history is usually household names such as Coca-Cola (KO), PepsiCo (PEP), General Mills (GIS) and Procter & Gamble (PG). Financial companies tend to increase their dividends, as do health care companies. If you do not want to pick individual stocks, you can choose Dividend Growth Dividend Growth Fund or exchange-traded fund (ETF). Your advisor can help you or you do it.
Follow a long-term game plan
The idea is not to over-dividend investment management. We intend to stick with the stock for a long time (unless some real disaster, or internal curriculum changes).
You do not want 100% of your investment as dividends, but should have its own portfolio, you have to pay a large part of it. Even if you are not in the distribution stage, it can make sense in your portfolio some of the dividend, because then you have the miracle of compound interest: you can put these dividends reinvested them.
However, especially when you are in the stage of investment income of the life cycle, when it’s all about cash flow, dividends in your portfolio is more likely to succeed.