This Perpetual Money Machine Never Runs Dry

Buy conservative stocks priced with 7% yield and you’ll never run out of money.

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Are you like 99% of investors, constantly tormented by the age-old question: “Will I run out of money in retirement?” Don’t worry; you’re in good company.

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I have good news for you. If you buy conservative dividend growers at accidentally high dividend yield price points, their 7% yields will always outpace the RMD (required minimum distribution) the IRS requires you to take each year. Your well will never run out of money.

 This, on top of the long-term historical growth of the S&P 500 of 10% per year, yields a portfolio pumping out total return of 17% when you combine growth over the long term with the dividend payout.

Here is the RMD table for 2024, which is based on the IRS’ Uniform Lifetime Table, which is the most widely used table (It is Table 3 on page 65). The IRS has other tables for account holders and beneficiaries of retirement funds whose spouses are much younger. Note that as of the 2023 tax year, you must be age 73 for the RMD rule to take place.