How Dividend-Paying Stocks May Help Boost Retirement Income
While no magic bullet, these types of stocks are worth considering, even after retirement.


When you’re retired, managing your investments can start to get a little tricky.
The urge you have to see your money grow is tempered by your concerns about taking too much risk at this time of your life. In essence, you want your financial cake, but you want to eat it, too — and it’s challenging to find a way to make that happen.
There is at least one option that’s worth considering for those who are determined to stay in the stock market after retirement, yet who also grow nervous whenever the market starts getting a little shaky.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
That option is dividend-paying stocks, which could provide you a little extra income even when the stock market isn’t acting as friendly as you would have hoped. Each quarter, these stocks pay you a certain amount per share that, depending on your personal lifestyle and/or investments, could help you pay the monthly bills or finance that special vacation you’ve been wanting to take.
Of course, that doesn’t mean dividend-paying stocks will always come through for you. In a poor economy, a lot can happen. Maybe the dividend will keep coming at more or less the amount you’ve come to expect. Maybe the amount of the dividend will drop a little — or a lot. Or maybe the company will temporarily stop paying any dividends at all.
And, of course, the overall value of a dividend-paying stock can go up or down, just like any other stock — so don’t think this is some sort of miracle guarantee in the market. It’s not. Far from it.
What it is, though, is one more tool in your investment toolbox that has the potential to reap rewards for you.
So, let’s say you’re intrigued and you want to move forward with this particular retirement investing strategy. Here are a few things to keep in mind as you contemplate building a dividend-paying arm of your portfolio.
Don’t Get Greedy
Right off the bat, you could be tempted to research which stock pays the highest dividend, let dollar signs light up your eyes and declare: “That’s the one.” Well, maybe. But, as counterintuitive as it might seem, going with the highest dividend isn’t necessarily the automatic correct answer.
Companies that offer exceptionally high dividends might be doing so for a reason. They could be a risky investment, and the high dividend is how they convince wary investors to buy their stock. Sure, maybe those high dividends will work out for you, but it’s worth being cautious about the potential downsides — especially when you’re in or near retirement.
Instead, Take a Walk on the Mild Side
OK, set that high-dividend stock aside for the moment, and look in the opposite direction. Maybe you should consider the stock of a company that’s a little more miserly with the value of its dividends but is in better shape when it comes to the corporate bottom line. In this case, you’ll need to settle for less income each quarter (I know, not the ideal), but perhaps you won’t toss and turn as much at night, worried about whether that portion of your portfolio is destined to go into freefall.
Check Out Some ‘Old Faithfuls’
Finally, you could consider companies that some people refer to as the “Old Faithfuls” of the dividend-paying world. They always increase their dividends — seemingly no matter what. A little research should introduce you to a few such companies that have been doing that for decades (for some ideas, try 11 Dividend Stocks With 55 or More Years of Payout Growth), and you can decide if that’s the way you want to go. (But be warned, even Old Faithfuls can change. Just because something has always happened in the past doesn’t mean it will continue to always happen.)
Remember, dividend-paying stocks aren’t a magical investment that carries no risk, but they can be a solid foundation to your future investment strategy.
Ronnie Blair contributed to this article.
New River Financial Group, LLC is a Registered Investment Adviser offering advisory services in the state of Virginia and other jurisdictions where exempted. New River Financial Group, LLC dba Martin Wealth Solutions.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Jim Martin is the president and founder of New River Financial Group with offices across Virginia. A Registered Financial Consultant and Accredited Asset Management Specialist, he has passed the Series 66 and Series 7 exams and is an insurance professional. Martin focuses on comprehensive financial planning to help individuals and business owners take control of their financial future.
-
S&P, Nasdaq Hit New Highs: Stock Market Today
A late-day rally wasn't enough to lift the Dow into the green as its six-session winning streak came to an end.
-
Five Things to Consider Now If You Want to Retire in 2026
To retire with confidence in the year ahead, tackle these essential tasks right now.
-
Striking Gold (or Gas): A Financial Pro Unpacks the Nuances of Energy Investing
Investing in the energy industry, particularly oil and gas, involves understanding the facts about how projects generate returns through cash flow and long-term asset building, while also being aware of the risks.
-
Escaping the New Golden Handcuffs: A Financial Expert Has a Plan for Today's Executives
Feeling stuck in your job? It could be your complicated compensation package, but it also could be where you live, your family or even how you view yourself.
-
I'm a Financial Planner: Here's How to Invest Like the Wealthy, Even if You Don't Have Millions
Private market investments, once exclusive to the ultra-wealthy and institutions, have become more accessible to individual investors, thanks to regulatory changes and new investment structures.
-
Four Ways a Massive Emergency Fund Can Hurt You More Than It Helps
Saving too much could mean you're missing opportunities to put your money to work. Redirect some of that money toward paying off debt, building retirement funds, fulfilling a dream or investing in higher-growth options.
-
I'm a Financial Planner: How to Dodge a Retirement Danger You May Not Have Heard About
Timing is everything, and sequence of returns risk can mean the difference between a retirement nest egg that's overflowing … or empty.
-
Caring for Aging Parents: An Expert Guide to Easing the Financial and Emotional Strain
Early conversations, financial planning and understanding the progression of care needs can help to mitigate stress and protect family relationships.
-
I'm a Financial Adviser: The OBBB Is a Reminder for Older People to Have a Long-Term Plan
The new tax bill presents a good opportunity for retirees to revisit tax plans, look into doing some Roth conversions and consider plans for long-term care.
-
I'm an Insurance Expert: This Is Exactly Why Your Insurance Rates Are Soaring (and What You Can Do)
A dramatic rise in the frequency and cost of severe weather and wildfires means you need to prepare, prepare, prepare — no matter where you live — for higher premiums.