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Don’t Follow The 4% Retirement Rule, Buy These 3 Dividend Stocks Instead

One of the tried-and-true strategies in retirement planning is the “4% Rule”. This rule holds that an investors should plan on withdrawing 4% of their savings each to live on in retirement. This way, a person could keep their nest egg intact for 25 years to maximize a person’s retirement savings. But rather than slowly erode your nest egg each year until it’s completely gone, there’s a better way: buy dividend stocks.

It’s rather easy to find stocks that pay 4% dividends. Just a few are telecommunications giant Verizon Communications (VZ), Big Oil member Chevron (CVX), and tobacco king Altria (MO). These stocks can pay you the 4% a retiree needs in dividend income each year, and the benefit of this strategy is that your principal does not wind down over time. You can keep your entire retirement portfolio and also secure the income needed to pay life’s expenses—a win-win. Even better, these stocks raise their dividends each year at rates that handily exceed inflation, meaning your income will actually grow above and beyond 4%.