Most investors fail to make dividends their #1 priority. When it comes to stocks, if you are retired or saving for retirement within the next decade or so, dividends and dividend growth must dominate your thought process.
In the coming weeks, I will lay out the 10 biggest potential tragedies and traps for investors this summer. Number 10 on my list is not recognizing that the recession is over. The media have largely missed the transition.
The magic number for retirement is four, as in a 4% annual draw on the initial balance of your retirement portfolio. Thus, if your portfolio totals $1 million, you draw $40,000 in year number one. In future years, you draw 4% or $40,000 annually, whichever is less.