Funding celebration spending such as dinners, gifts, and trips from dividends rather than principal requires as little as $72,000 at a 5% yield for a $3,600 annual budget.
A 5% yielder with 7% annual dividend growth can match a flat 10% payer's income within a decade while better preserving principal.
Divide last year's actual celebration spending by 5% to find your required portfolio size. For example, a $6,000 annual habit needs roughly $120,000.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Retirement planning usually starts with fear: housing, healthcare, and outliving the portfolio. Yet many of the moments people remember most have little to do with those necessities. Anniversary dinners. Birthday gifts for children and grandchildren. A weekend getaway. Tickets to a concert or ballgame. Funding those experiences from investment income, rather than repeatedly dipping into principal, is a different exercise than simply paying the bills.