Dividend Investing

Background

Dividend investing focuses on owning shares or funds that regularly distribute dividends. For retirees it can feel like a natural income source without selling units, but dividends are not guaranteed and are taxable.

Explanation

High-dividend stocks and dividend funds can provide cash flow but may come with sector or stock-specific risks. Many investors prefer growth options with SWPs, which allow better control over how much and when to withdraw.

Example

Instead of depending only on high-dividend stocks, a retiree might hold diversified growth funds and run SWPs, comparing the after-tax, after-cost results against dividend options.

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