Dividends Forever! Introduction To The Dividends Forever Portfolio

In 1980, 38% of American workers had access to pensions, or defined benefit retirement plans. In 2008, the percentage of Americans with access to private pensions had fallen to just 13%. With people living longer, most companies can no longer afford to pay retirees a pension for life. These defined benefit plans have been replaced by defined contribution retirement plans, or most notably, the 401(k). To make up for the loss of a guaranteed income, many investors, to include myself, plan on using dividend stocks as a means of funding retirement.
What About Social Security?

Source: Kiplinger.com
Many television pundits will frequently claim that the Social Security Administration will soon run out of money. That is definitely not true. According to the government, Social Security will be unable to pay full benefits in 2035. Social Security will be around for a long time, but if the trend line continues, retirees will not be able to collect their full benefits starting in 2035. Nevertheless, for retirement planning purposes, I do not account for Social Security income.
Dividend Stocks Outperform

Source: Suredividend.com
The chart above shows that dividend paying stocks have historically outperformed stocks without dividends (going back to 1928). All dividend-paying stocks are broken down into five quintiles, with the 5th quintile representing the highest yield and the 1st quintile having the lowest. Ironically, it was the 4th quintile that provided the... Read more