"As soon as you start thinking about retiring, your relationship with and concern about money understandably change, and this begins as soon as the paychecks you have relied on for decades start to wind down and/or end altogether. This is a harsh reality after earning a steady paycheck for what feels like forever, and you now have to think beyond bi-weekly or monthly payments."
"Turns out, you might not have to think this way at all, as dividend ETFs are quickly becoming a form of paycheck replacement, as retirees convert their hard-earned savings and 401(k)s to bridge the gap and turn these savings into a predictable, regular monthly (or quarterly) income. This shift provides what every retiree needs with a sense of stability and freedom, allowing them to retire comfortably and live a well-deserved lifestyle after decades of hard work."
"Why Dividend ETFs Fit the Retirement Mindset One of the biggest challenges in retirement, especially if you don't want to adhere to the 4% rule, is to generate a consistent cash flow while keeping risk levels under control. It's hard to pick individual dividend stocks if you don't know the market well, so retirees rightfully pivot to ETFs as a way to own dozens or hundreds of companies in one fund."
As paychecks wind down, retirees must transition from relying on regular wages to generating sustainable income. Dividend ETFs offer a form of paycheck replacement by converting savings and 401(k)s into predictable monthly or quarterly distributions. ETFs provide diversification across dozens or hundreds of companies, reducing the impact when a single company cuts dividends. Many dividend-focused ETFs hold companies with histories of maintaining or increasing dividends, supporting steady cash flow. Adopting a dividend ETF mindset can help cover rising inflation and healthcare costs while providing stability and freedom for retirees to maintain their desired lifestyle.
Read at 24/7 Wall St.
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