Funding retirement through dividends allows investors to spend income while preserving capital, easing fears of outliving savings. However, chasing high yields can lead to significant risks such as dividend cuts and capital loss, making a cautious strategy essential. Evaluating a company's financial health is critical, especially with market uncertainties like tariffs affecting earnings. Therefore, understanding both risks and rewards of dividend investing is crucial for sustainable income during retirement.
Whenever you have the opportunity to spend just the dividends or interest without having to touch that invested principal, you can put those fears of running out of money amid retirement to rest.
...higher growth accompanies higher risk, higher yields also tend to come at the cost of a more elevated risk profile.
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