This article is for investors who are retirees or close to retirement.
Ultimately, most retirees want safe income – cash they can use every day to pay the bills and enjoy life. So, the goal of a retirement stock portfolio is to generate enough income for those uses.
How much income do you need to earn from your dividend portfolio?
You will earn income from your dividend portfolio and other sources. To figure out how much income you need to earn from your dividend portfolio, you first need to know how much income you’ll be earning from other sources such as pensions or perhaps a part-time job.
Dividend Income = Desired Income for Retirement – Income from Other Sources
For example, if you desire $50,000 of retirement income and you earn $10,000 from other sources, then, you’ll need to earn $40,000 of dividend income.
The goal? To maximize returns while earning a growing dividend. Some investors think of dividends as a source of cash to pay their bills. That serves as a motivation for them to earn more dividends, until all bills are paid regularly. After which, they become financially independent.
That’s a fine way to think of dividend investing, but you can get to financial independence quicker. Here’s how. Read More