A portfolio of $900,000 can potentially allow a retiree to live on dividend income, especially when combined with Social Security benefits. Achieving a 4% dividend yield may generate about $36,000 annually, which alone may not cover all expenses unless one maintains a very frugal lifestyle. However, when combined with Social Security benefits, averaging $24,000 per year, retirees may find their financial outlook considerably improved. It's vital to have realistic expectations and consider diversifying income sources for better financial stability.
Living off of passive income is something retirees do often. And with the right investing strategy, it's something you can do, too.
The amount of money your portfolio is able to generate in dividend income will depend on the specific assets you own. But let's assume you're able to generate a 4% dividend yield in your portfolio.
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