Many investors want to know whether or not their individual portfolios can make them financially independent during retirement. In other words, just how much dividend income do you need to live comfortably during your golden years, and how large a portfolio is required? That’s a complicated question, but here’s a basic guide that can help you think through some of the biggest factors.
It could be a decent idea for long-term dividend growth investors to consider.
This is arguably the highest quality large bank in America. The company’s highly conservative banking culture means that despite its massive size and complexity, it was able to work through the financial crisis largely unscathed and remained profitable the entire time.
The company generates consistent free cash flow, maintains a conservative balance sheet, operates in a slow-changing industry, sells relatively recession-resistant products, and has grown its dividend for more than 60 consecutive years.
When combined with the company’s valuable real estate portfolio and predictable stream of high-margin rent payments and royalty fees from its franchises, McDonald’s appears to represent a fundamentally lower-risk dividend growth investment.
Tax-deferred retirement accounts like IRAs and 401(k)s serve as an essential part of most people’s long-term savings plans. While these are powerful tools, they also come with some tax complications after investors reach a certain age due to required minimum distributions, or RMDs. Let’s take a closer look at the complications posed by RMDs, as well as the suitability of using dividend stocks to meet these requirements.
The Social Security Administration estimates that two thirds of retirees will get the majority of their income from the program, which has important implications for investors hoping to supplement these payments with dividends. With this in mind, let’s take a look at how dividends can affect Social Security benefits to help you maximize your income in retirement.
There’s a lot to like about this company: Its business generates recession-resistant cash flow, owns premier real estate locations, is managed conservatively, has a solid balance sheet, and should have a long runway for growth given the industry’s fragmentation.
It’s arguably one of the best dividend growth stocks in tech.
Thanks to its excellent financial health and commitment to growing its payout, income investors can likely count on the company to continue delivering double-digit dividend increases in the years ahead.
