The traditional wisdom for funding retirement used to be the
“4% rule.” You would withdraw 4% of your savings in year one, followed by “pay
raises” in each subsequent year to account for inflation. The theory: If you’re
invested in a mix of dividend stocks, bonds and even a few growth stocks, your
money should last across a 30-year retirement.
But today’s world is different. Interest rates and bond
yields have been stuck in the basement for far too long, reducing future
expected returns. Compounding the problem: Americans are living longer than
ever before.
If you’re wondering how to retire without facing the
uncomfortable decision of what securities to sell, or questioning whether you
are at risk of outliving your savings, wonder no more. You can lean on the cash
from dividend stocks to fund a substantial portion of your retirement. In fact,
Simply Safe Dividends has published an in-depth guide about living on dividends
in retirement.
Many companies in the market yield 4% or more. And if you
rely on solid dividend stocks for that 4% annually, you won’t have to worry as
much about the market’s unpredictable fluctuations. Better still, because you
likely won’t have to dig into your nest egg as much, you’ll have a chance to
leave your heirs with a sizable portfolio when the time comes.
Here are 20 high-quality dividend stocks, yielding on
average above 4%, that should fund at least 20 years of retirement, if not
more. They have paid uninterrupted dividends for more than 20 consecutive
years, have fundamentally secure payouts and have the potential to collectively
grow their dividends to protect investors’ purchasing power over time.
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