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I’ve always been a growth investor. But as retirement nears I’ve been questioning whether it is better to stay investing for growth and sell some of it monthly for income or to invest in dividend paying stocks or stock funds for income.
Which is a better path to take and why? Thank you all as always for your input
I’d favor investing for total return through a combination of stocks and bonds. Meanwhile, hold a reserve of cash investments and high-quality short-term bonds equal to perhaps five years of the portfolio withdrawals you’ll need to supplement Social Security and any pension you have. If you invest for dividends, you’ll inevitably sacrifice diversification.
Thank you Jonathon. I always appreciate and respect your advice and input
I maybe should have added that in our circumstance we will have enough in pensions and SS to cover all most all of our current expenses, if that makes a difference
In that case, you won’t need much in cash and short-term bonds to cover upcoming living expenses, and you might want to tilt your remaining portfolio heavily toward stocks, assuming you’re comfortable doing so.