• Home
  • E-Booklets
  • Pay Less Tax
  • Privacy Policy
  • Cheatsheets
  • Contact Us
  • About us

Retirement Income

New Ways to Get More Retirement Income

  • Retirement Advisors
  • Retirement Insurance
  • Retirement Investing
  • Retirement Living
  • Retirement Planning

Income Stocks

Posted on March 13, 2016 by bobrichards

income stocks

(c) Can Stock Photo

To eliminate stocks from your retirement income plan would be a mistake. Not only are some stocks significant income stocks (dividends of 4% annually and more) but their growth in dividends serves as protection from inflation.

Has the price of food increased at the supermarket?  Has the price of clothes increased?  Who received those higher prices?  The manufacturers of food and clothing. YOU could have been an owner in agricultural or food processing companies or clothing manufacturers. Instead of bearing the burden of higher prices without offset, you can be a participant of growing dividends from income stocks.

Income Stocks vs Insured CDs

The chart below shows why during a 30-year retirement (e.g. from age 60 to age 90), the increasing income from stocks is essential as compared to holding money in bank CDs.

groeth of dividends vs 1 yr CD rates

Data 12/31/75 through 11/30/15. Dividends based on a $10,000 investment 12/31/75 in a basket of stocks representing the S&P500 from American Funds Distributors. Interest rates from Federal Reserve year end rate on 1 yr CDs. You cannot invest directly in an index. Past performance is not a guarantee of future results and an analysis of a different period may have revealed different results.

Using the above chart, answer for yourself: "Have the dividends from income stocks been more reliable than interest from insured CDs?"

A very sound method for investing in income stock is the Dow Dividend Strategy. This strategy has you buy the ten highest dividend yielding stocks in the Dow Jones Average. These are listed below as of 12/11/08 (see current list at www.dogsofthedow.com).

Symbol Company Price Yield Small
Dog
NYSE / NASDAQ The Dow stocks ranked by yield on 12/11/08 on 12/11/08 on 12/11/08 on 12/11/08
BAC Bank of America 14.91 8.58% Yes
PFE Pfizer 16.56 7.73% Yes
GE General Electric 17.05 7.27% Yes
AA Alcoa 9.98 6.81% Yes
DD DuPont 25.94 6.32% Yes
MRK Merck 26.44 5.75% No
T AT&T 27.94 5.73% No
VZ Verizon 32.47 5.67% No
PM JP Morgan Chase 29.94 5.08% No
KFT Kraft 26.81 4.33% No

As you can see from the "yield" column, these income stocks pay very healthy dividends and this strategy of annual rebalancing this portfolio of ten highest yielders has persistently outperformed the market over the past few years as well as past few decades (see long term history).

dogs of the dow

This is certainly not the only method of buying income stocks. But hopefully we have made the point that over time, retirees need the power of growing dividends from income stocks.

How Wealthy People Invest

To get wealthy, invest like the wealthy
  • Why the wealthy steer clear of mutual funds
  • How the rich systematically make money in the market
  • Key metrics that differentiate good and bad investments
  • A comparison of ETFs and separately managed accounts you have never seen
  • Stop making the same investing mistakes as everyone else who listens to CNBC and reads Money Magazine. Do what the rich do! Free guide explains how they think and make investment choices.

    You might also like:

    • Retired and Stocks Losing Value
      Retired and Stocks Losing Value
    • Recession Can Be Good for Retirees - The Silver Lining of Recession
      Recession Can Be Good for Retirees - The Silver Lining of…
    • When Will the Stock Market Recover
      When Will the Stock Market Recover
    • Bear Market - When Will It End?
      Bear Market - When Will It End?
    • How to Pay Lower Taxes on IRA Distributions
      How to Pay Lower Taxes on IRA Distributions

    Filed Under: Supplemental Retirement Income

    About bobrichards

    Bob Richards
    Editor | Involved in Various Marketing Positions within the Financial Services Industry

    Leave a Reply Cancel reply

    Your email address will not be published. Required fields are marked *

    Second place winner best retirement blog

    SH award winner SMALL (1)

    Not Enough Savings to Retire?
    Learn Six Ways to Earn Retirement Income (from home)

    You do not need special talents, skills, computer knowledge, etc. We show you multiple ways others are working a few hours a week to generate a comfortable retirement income.

    Download Free Copy

    Latest Posts

    Recession Can Be Good for Retirees - The Silver Lining of Recession

    Recession Can Be Good for Retirees - The Silver Lining of Recession

    Bear Market - When Will It End?

    Bear Market - When Will It End?

    When Will the Stock Market Recover

    When Will the Stock Market Recover

    How to Pay Lower Taxes on IRA Distributions

    How to Pay Lower Taxes on IRA Distributions

    Retired and Stocks Losing Value

    Retired and Stocks Losing Value

    Categories

    • 401K IRA Roth Withdrawals, Distributions, and Rollovers
    • Annuities for Income
    • Estate Planning
    • Retirement Advisors
    • Retirement Insurance
    • Retirement Investing
    • Retirement Living
    • Retirement Planning
    • Social Security
    • Supplemental Retirement Income
    • Tax Savings
    • Alternative Investments
    • E-Booklets
    • Pay Less Tax
    • Privacy Policy
    • Cheatsheets
    • Contact Us
    • Subscribe
    • Sitemap

    Recent Posts

    • Recession Can Be Good for Retirees - The Silver Lining of Recession
    • Bear Market - When Will It End?
    • When Will the Stock Market Recover
    • How to Pay Lower Taxes on IRA Distributions
    • Retired and Stocks Losing Value

    The Retirement Income Blog

    25A Crescent Drive #1508
    Pleasant Hill CA 94523
    T: 844-887-4131
    E: [email protected]

    © 2018 Retirement Income