The Dividend Illusion: Why High Yield Strategies Won't Save Your Retirement The quest for high yielding investments has become a dominant force in retirement planning, with many advisors and investors focused on generating income to match Social Security checks.
A recent calculation suggests that a married couple collecting average benefits could replace their combined $47,424 annual check with dividends by investing around $1. 35 million at a 3. 5% yield or $474,000 at 10%.
However, this metric is misleading and perpetuates the dividend illusion. The underlying assumption is that high yield investments can provide reliable income without sacrificing principal value.