I know we are not there yet, as you are only a little older than I am, but I believe we think differently as we
get to retirement, and will again as we get to RMD.
Many strict DGI enthusiasts seem to believe that if they buy the stalwarts, with increasing dividends, the game is won.
Depends what one wants. Many say they will collect the dividends, the increases will keep them ahead, and they will never sell.
DVK is nice enough to give a real life example. His end of June portfolio value was $104,702.
His projected 12-month total dividends: $3671
IF he had to take a RMD next year, and today was December 31st, his RMD would be $3812. In his first
year of RMD, he would have to sell something.
People will say that he has good dividend growth, and maybe he will catch up.
Won't happen. The only way it will get better is if the market drops.
If in the first year of RMD, a portfolio is not earning 3.649%, something will have to be sold. DVK is at 3.5%.
By the fifth year it is up to 4.2% portfolio yield, regardless of how many, or how big, increases were. |
