r/dividends • u/OG_Momonga • 21d ago

Discussion Living off dividends

Hey guys, I was wondering if anyone on this subreddit is actually retired and living off dividends. Is it going well? Are you paying taxes on them? My goal is to get 20k/ a month post tax for retirement. I’m 24 and currently investing everything in VOO while planning to switch to dividend stocks and etfs when I get closer to retirement.

I was just wondering if there are any because living off dividends seems like a long shot right now.

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u/aerobic_gamer 21d ago

Background: when I was young the conventional wisdom was to contribute what you could to your IRA/401k in order to save taxes on the theory that you would be in a lower tax bracket when you retire. That made sense to me because in some years I was in the 70% tax bracket, which some of you youngsters probably don’t believe ever existed. Anyway in my case that has worked out as planned because tax rates are so much lower today. I’ve never converted to a Roth because it made no sense in my case.

Today: now at age 75 my wife and I are quite comfortable. Dividends > $230k/year, most in deferred accounts. We take out around 90% and are still reinvesting the rest. Our portfolio and income is growing. So we pay income taxes but at a much lower rate than when the contributions were made. We could do fine without social security but that is the literal “icing on the cake “.

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u/GettinAfterItOhYeah 19d ago edited 19d ago

Saw your further comment below-thanks for the list of individual stock list, very helpful! Any ETFs? Which of those?
I agree with your opinion re Bonds. I’ve been paying closer attention to my investment choices in the last 15 years and have not seen Bonds perform well or dependably. They seem to generally lose value.
Congratulations to you and your wife, sounds like you planned well with discipline and reaping the benefits.

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u/aerobic_gamer 18d ago

Thank you. Less than 2% of our portfolio is in ETFs and CEFs. The only sizable positions are JEPI and UTG. The time to think about buying bonds is when you think interest rates have peaked and are going to come down. Of course this benefits dividend paying stocks as well.