How do you suppose you’re going to spend your retirement fund? No, we don’t mean to ask whether you’re planning on going on tropical vacations or ski resorts. We really want to challenge you to think about how much money you’re going to spend, on what, and why.
The general rule is that you’ll spend 4% of your savings in your first retirement year. Following that, you’ll have to add subsequent raises to make up for inflation. Doing the math according to this rule, depending on how much you’ve managed to save so far, could be quite scary but you shouldn’t panic!
There is a way to ensure you’ll have enough money to see you through 20 years of retirement. With the help of a mix of bonds, dividend stocks, and even a few growth equities you’ll manage to achieve your dream retirement!
So, why is this plan arguably better than traditional ones? For one, you can rely on cash from dividend stocks for a considerable portion of your retirement funds. A lot of companies yield 4% or more, meaning you don’t have to worry much about the market’s unpredictable fluctuations. Secondly, you could leave your heirs with an impressive portfolio when you pass away. It’s a win-win!
The question now is where to invest, right? You’ve come to the right place because we’ve prepared a list of 6 dividend stocks that yield on average well above 4%- that’s enough for 20 years of retirement, if not more, depending on your other savings and lifestyle.
Click through to find out more!
UGI
This diversifies utility has managed to increase its dividend for 33 consecutive years! If that doesn’t sound safe to you, I don’t know what does! If you want predictable cash flow from the utility sector, look no further. It’s valued at $7.0 billion, a number that will assure every business owner that the company is doing very, very well for itself.
They’re the largest propane distributor in America and a leader in European markets, meaning they enjoy recurring demands for their services- unsurprisingly, given that we don’t expect propane to be obsolete any time soon. In fact, 60% of the company’s adjusted earnings are generated by distributing propane in the U.S. and Europe.
As long as the world will need energy, UGI will be happy to provide it!
Here’s the thing. Certain elements such as changes in economic activity and weather could mean a shortage in terms of demand. But overall you should expect a pretty balanced deal with UGI. Many experts even say that UGI’s scale makes the low capital requirements fairly predictable.
They also did well during the 2007 and 2009 financial crisis, generating stable or higher free cash flow each year. Even during the Coronavirus pandemic, management expects the dividend to remain well covered by earnings.
There’s no use for second thoughts when it comes to UGI.
