Retirement Investment – The idea is to build a portfolio that can generate income while you sit back and relax after decades of work.
Some of the best stocks to help you fund your retirement aren’t meme stocks or other flashy trends, which can fluctuate wildly in value. Instead, dividend stocks with a reasonable expectation of returns are more likely to provide you with a chance of earning a steady income during retirement. Dividends make regular payments, based on the number of shares you own.
Here are some ideas about dividend stocks that are likely to provide continued income during retirement.
1. 3M Co.
Manufacturing company 3M (MMM) has seen earnings growth over 63 years. This company is what is known as Dividend Aristocrat. These are companies listed as part of the S&P 500 Index, which have consistently paid dividends – no matter what happens in the market or the economy – at least once a year for at least 25 years.
3M operates in many areas, including healthcare, consumer goods and safety. There are many well-known brands owned by 3M, such as Post-it and Scotch-Brite, making the company a staple in the United States and likely to have long-term staying power.
2 – The Coca-Cola Company.
Coca-Cola (CO) is one of the most well-known companies and has paid dividends for 59 years. In addition to the main soda, Coca-Cola produces a number of non-alcoholic drinks and also sells bottled water. Coca-Cola has long been a staple in the United States and elsewhere, and it has long-term survival potential.
3. Edison consolidated
Profit return: 3.99%
Utility company Consolidated Edison (ED) has paid dividends each year for 47 years. The energy company offers a variety of energy services, particularly in New York and New Jersey.
Utilities are often considered good options for retirement portfolios, due to their earnings as well as the fact that we rely heavily on them in the United States to keep things running.
4. Procter & Gamble
Procter & Gamble (PG) has been paying dividends over a 65-year period. Procter & Gamble is best known for its consumer products in the beauty and personal care industries, as well as in women’s care, baby care, and healthcare. Many of the products that consumers use on a regular basis are Procter & Gamble brands, often staples that remain in demand even during downturns and adverse market events.
5. Realty Income Corp.
Completing a retirement portfolio with real estate can help you diversify over time. Realty Income Corp. paid. (O) earnings for 26 years. This can be a profitable addition to an investment portfolio, especially since dividends are paid monthly rather than quarterly.
6. Dividends on mutual funds
Another option is to buy shares of mutual funds. Dividend mutual funds offer instant diversification because they focus on owning shares of several dividend-paying companies. You buy one share of a mutual fund, and receive a small share of ownership in each company included in the fund.
Funds often have different goals. For example, you could choose a fund that focuses on fixed income through dividends or a fund that focuses on dividend growth. Some examples of potential mutual funds include:
- Vanguard Dividend Distribution Estimation Index Fund Vanguard Admiral Shares (VDADX)
- Vanguard Dividend Growth Fund – Investors Stock (VDIGX)
- Fred Hermes Strategic Value Class A Stock Dividend Fund (SVAAX)
It is important to pay attention to the loads (fees charged at the time of buying or selling the fund) and minimums when investing in dividend mutual funds.
For example, SVAAX has an attractive return for a mutual fund, but it also comes with a burden that you don’t see with the other two listed funds. On the other hand, Vanguard often requires that you make at least a minimum investment of its own money, and you may not be able to meet that minimum. For example, you must invest at least $3,000 up front to purchase any of the Vanguard funds listed above.
7. Exchange Traded Funds (ETFs)
For those who are looking for dividend funds that can be traded more easily and may give you the opportunity to get them with small amounts of money, Dividend ETFs can be a viable option. With an ETF, you have exposure to dividend-paid assets, but you don’t actually own shares in the underlying investments. However, expense ratios can be lower than mutual funds. Also, instead of trading the investment once per day as mutual funds do, you can set market orders for the ETFs.
Some examples of dividend ETFs include:
- iShares Select Dividend ETF (DVY)
- ProShares S&P 500 Dividend Aristocrats ETF (NOBL)
- Global X SuperDividend ETFs (SDIV)
Although some ETFs have higher returns than dividends, be careful about relying only on the return. Higher returns aren’t always stable, and there’s nothing to stop a company or ETF from cutting its dividends in the future, leaving you without the profits you’re looking for to fund your retirement.
There are plenty of options when it comes to dividend stocks that can provide you with income as well as increase your capital. Carefully research your options and consider adding investments that are most likely to help you reach your goals.
As always, it is a good idea to work with a financial professional to ensure that you are making the best decisions possible. You can search for a consultant in the Financial Conversations News Solution Center.
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