VYM - 4 Keys And 3 Top Picks For Retiring With Dividends
2024-02-08 07:15:00 ET
Summary
- Retiring with dividends can enhance your retirement, both emotionally and financially.
- We share the four keys to retiring with dividends.
- We also share three of our favorite retirement dividend stocks right now.
Retiring with dividends is arguably the best way to finance your golden years because:
- It mitigates the sequence of returns risk. Instead of counting on the S&P 500 ( SPY ) and perhaps a bond fund ( BND ) to generate sufficient total returns on a consistent enough basis to avoid depleting your principal, if you live off of passive income from dividends such that you never have to sell shares, you can be largely agnostic to where stocks and bonds trade over time.
- It keeps you focused on what matters most. Instead of having your head spin and retirement plans change with daily market volatility, your retirement target consists of the much more stable dividend income metric.
- It sets you up for potential long-term total return outperformance since dividend-paying stocks tend to outperform non-dividend payers.