Preview:

Let’s tackle a question that many retirees ponder: Is living off dividends a viable retirement income strategy? Investors will often look to dividends as a source of income in retirement so let’s talk about the potential pitfalls and benefits of relying solely on dividend-paying stocks.

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More About This Episode:

Tune in as Ryan explains the role of dividend investing in his eyes and shares other strategies to consider when it comes to funding your retirement. Dividends are just one tool you can utilize to reach your income goals so understanding the various strategies is essential in planning.

Here’s what we cover in this episode:

0:00 – Intro

1:56 – Other strategies to consider

2:48 – Closing thoughts

Watch the full interview on Wealth Warehouse: https://www.youtube.com/watch?v=kzGH5wXPDXQ

Resources:

Retire Pilots – https://retirepilots.com

Get your FREE Retirement Toolkit – https://bit.ly/3ZmZsaX

Pilot Tax – https://pilot-tax.com/

The Pilot’s Advisor Podcast is also on video. Watch & Subscribe on YouTube: https://bit.ly/3EIEBW2

Connect with Pilot-Tax: https://pilot-tax.com/

 

Episode Transcription:

(Note, this is an automated transcription. Please forgive any errors.)

Walter Storholt: Uh, on today’s video here on the Pilot’s Advisor, we’re going to talk about living off dividends. Is it a solid retirement income strategy? I’ll grab Ryan and we’ll get started. All right, Ryan, I’m sure this is a question you get all the time from folks. Solid income retirement strategy to live off of dividends. I know people in the past who have, uh, tried to do that or still kind of swear by that strategy. Do you think?

Ryan Fleming: Well, it’s interesting. I don’t get it all the time because I feel like pilots really don’t understand how much more complicated the distribution phase of retirement is. But I have had a few clients that they had that plan. And, uh, you know, I don’t think it’s a horrible plan, but I don’t think it should be your only plan. Um, you know, if you’re relying on stocks, uh, that have a dividend that pays out, well, obviously that can change over time or that company can run into some problems. And so with those fluctuations, it could blow up your whole retirement income plan. And, you know, I don’t want to throw any stocks, uh, or companies out there, but I mean, just look at what’s happened to GE and look at what’s happened to Boeing over the years. What if that was a major part of your income plan in retirement? It’d be totally blown up right now. So I think there’s a big problem with a lack of diversification when you’re only relying on, uh, dividend paying stocks for, for your income. And once again, I mean, the money growing with growth potential, just with growth stocks or any portfolio that you built out there, you’re, um, going to be paying tax on it either way. I mean, whether it’s a dividend or you’re liquidating, you’re paying tax on it. So, um, I don’t necessarily think dividend paying stocks is the best solution, and it might be a part of the solution, but I definitely don’t think it should be your, your whole strategy or even focusing on that. I think it’s much more important to have a very diversified portfolio that any fluctuation, whether it’s in the US Markets or overseas, aren’t going to blow up your whole plan.

Walter Storholt: Yeah, you mentioned that you probably wouldn’t recommend this as an entire strategy for a pilot coming in. So if somebody did come into you and they had this idea or this is how they were kind of planning to live out their retirement and you start talking with them, um, what is that conversation going to evolve? To what other areas or strategies might you then start pointing them in?

Ryan Fleming: Well, the only reason I would keep this as a potential strategy is if they already had a high amount of dividend paying stocks in a taxable account already, and if they had it in a taxable account already, I wouldn’t want to change or blow up that plan because it would just cause, you know, tax implications.

Walter Storholt: Okay?

Ryan Fleming: Now, if they had a bunch of their money still in a retirement or qualified plan, well, guess what? We can fix that with no tax, uh, ramifications at all. And I would probably want to do that with a more diversified approach.

Walter Storholt: Okay, very good.

Ryan has put together a great retirement planning toolkit for you

Well, uh, if you’ve got questions for Ryan or you want to talk about what would be a better strategy for you as you plan for retirement, as you think about, uh, you know, moving away from working with, uh, your airline and moving on into your retirement years, don’t hesitate to reach out and give Ryan a call. In fact, the best way to get in touch is to pick up the retirement planning toolkit that Ryan has put together for you. You can get that toolkit@retirepilots. We’ve got it linked right in the description of today’s show. So whether you’re watching us on YouTube or listening on your favorite audio podcasting app, just look for that show summary or description. You’re going to find a link right there to the toolkit. It’s packed with lots of great guidance, advice and a great starting point for anybody wanting to explore that retirement world. It’s also going to tell you a little bit more about what it’s like to work with Ryan and the team at Retire Pilots.

Ryan, thanks for the help and we’ll see you next episode

So Again, that’s@retire pilots.com get your free retirement toolkit. Ryan, thanks for the help and we’ll see you on the next episode.

Ryan Fleming: Take care, Walter. Have a good one, everyone. Fly safe.

Speaker C: Information is for illustrative purposes only and does not constitute tax, investment or legal advice. Always consult with a qualified investment, legal or tax professional before taking any action.