Most people have heard of the recent fad purchasing of stocks that have hurt some hedge funds and has Congress wanting to investigate. Fads are fine for some, but people could do with an education on dividend stocks. These stocks can be used for income, b

• Author: Jeffrey Simmons
• Posted: 2024-05-30

Pension Worries

There are many cities around the nation that are buckling under for a multitude of issues, including the fact that they are having to pay pensions. After the initial buckling, they are less able to regain their footing financially because they have an enormous amount of pensions to pay out. This is a budget crisis that is growing. There are also many companies that pay employees pensions that are finding it harder to make ends meet without making hard choices. The loss of a business hurts the economy and puts people's retirement funds at risk with some caveats.

Regular Retirement

The 401K has become the most common form of retirement that people have access to that is not social security. The next on that list is an IRA. Both of these types of investments give certain penalties if a person taps into them early. It also has the problem of market fluctuations, as seen by the recession in 2009. The other problem is that a person has to rely on others to manage it. These issues can cause more worries about retirement than any feelings of relief that a person should have. These are good options for people.

Social Security

People are well aware that the Social Security program has been mismanaged. Congress keeps borrowing from it and never paying it back. The amount paid barely helps people support themselves and many retired people need to find a job to be able to make ends meet. This means that people with medical issues are never able to be settled in their life because they are always financially strapped. When it is thrown in that people are expected to live longer, this is a drain to the system. When fixes are proposed, the political spectrum goes mad about that.

Self Management

One of the abilities of a person that wants to invest in stocks that pay dividends is that they are able to manage the stocks and their own wealth. If they want to reinvest the money into more stocks, they can. If the person needs the money for some reason, they can have it. They do need to pay taxes, but there are no penalties for them taking care of their own business. No other person can make a mess other than the employees of the companies they are invested in. This gives a strong sense of security.

Retirement Planning

A person who is investing in dividend stocks can take it easy when they want to retire. They may need to review their stocks, but they have a solid income, not an annuity from a decreasing fund like the 401K or the IRA. This means that they can live as long as they can and never worry about their financial stability. Unlike pension funds, they also do not need to worry about embezzlement or other types of corruption. This allows a person to plan when they can retire and how much they have to spend on their needs.

The news keeps being filled with bad news when it comes to the money that is available to retirees. Dividend stocks are normally far more stable than stocks that do not pay them out. They eventually pay for themselves and then what is paid out is profit. Social security and pensions keep proving to be shaky in the current situation. A 401K or an IRA is being managed by others and it pays an annuity, which means they can run out eventually. Dividend stocks can keep paying and can then be an inheritance to family. It just takes planning that is not concerned with fads.