Dividend Income Investing is a strategy of buying stocks with higher dividend yields. Stock dividends are paid out to stockholders as a way for the corporation to share a portion of quarterly profits with their investors. Companies that pay dividends are considered to be lower risk and more financially secure than non-dividend-payers. These stocks also have capital appreciation potential over time, which makes them appealing to many retirement investors.
Dividends are taxable when paid to a taxable investment account; however the tax liability is sheltered when paid to an IRA. Dividend payments can be withdrawn as an income source or reinvested to achieve dollar-cost-averaging and compounded growth.
REITs (Real Estate Investment Trusts) are an income generating investment category with growth potential, which may compliment a Dividend Income investing strategy. A 'REIT' is a managed fund comprising various properties that produce rental income, such as: Apartment Complexes, Office Buildings, Hospitals, Retirement Homes, Warehouses, and Shopping Malls. Some REITs pay high dividend yields, which can be an attractive way to diversify an income investment portfolio; certain risks should be considered before investing.
Avenue Retirement Services can provide specific advice for such strategies if deemed suitable to clients' investment objectives, goals, and risk tolerance.
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