How To Collect 8.7% Yields Each And Every Month: PGX, PTY, APLE

 | Sep 08, 2019 02:04AM ET

How much do you need to save to retire comfortably? Not as much if you think if you buy the right monthly dividend payers.

How you invest your retirement portfolio is more important than how much you have. Especially today, with “dumb” retirement money collecting just 1% in safe bonds.

That 1% won’t even get it done if you save the $1.7 million most Americans believe they need. (And don’t worry, they are wrong anyway. You don’t need nearly that much money to retire on dividends alone.)

Financial experts are incorrect, too. Here is more advice based on, well, not knowing which dividends to buy in retirement:

  • The AARP says you’ll need $1.18 million to generate $40,000 a year.

  • A recent Business Insider look at retirement says that if you want to live on about $65,000 in dividends, you’re looking at a $3.8 million nest egg.

  • And financial “guru” Suze Orman dropped jaws by declaring: “You need at least $5 million, or $6 million. Really, you might need $10 million.”

    • The truth is, most of these estimates involve a combination of fixed-income investments (no growth!) and tired blue-chip stocks (little growth and insufficient yield!). In reality, as long as you’re in the right kind of dividend stock, you can retire on half of what the conventional wisdom says you need.

    But what’s the “right kind of dividend stock”?

    Yes, you want a high headline dividend yield. That’s what most “first-level” investors look at. The mistake they make is never looking past yield, and toward other important factors.

    You need a healthy dividend that’s primed for growth . And you need actual business growth, too. Your nest egg needs to grow in retirement to offset the occasional big-ticket emergency that could claw away at your income-producing potential.

    A monthly payout is pretty helpful, too.

    I don’t know about you, but my electric utility and wireless provider don’t send bills every quarter. They come each and every month, whether I want them to or not. But most of the blue chips that traditional retirement investors would have you pile into typically only dole out income each time the season changes.

    I prefer a reliable stream of monthly income, which you can get from monthly dividend stocks and funds.

    This isn’t just a convenience play. Monthly dividend stocks can put up some serious outperformance once you factor in their often Street-clobbering payouts. Just look at how this three-pack of big-name monthly dividend payers have done against the bluest of the blue-chip dividend stocks: the Dividend Aristocrats.

    Hail to the REAL Dividend Royalty!