Sat Aug 24 2024, by Tyler Gardner

How to Invest $2 Million for Retirement to Generate Over $100,000 in Dividends

I'm Tyler, a former financial advisor and portfolio manager, and today I'm sharing exactly how I would invest $2 million for retirement to achieve over $100,000 a year from dividends alone. My goal is to provide financial insights so you don’t have to pay for them.

1. Invest in Dividend Funds

First and foremost, I would allocate 90% of my assets across four dividend funds:

• XSHD's Small Cap ETF
• GlobalX's Super Dividend ETF
• Invesco's High Dividend ETF
• Invesco's Equity REIT (real estate investment trust) - specifically setting aside $450,000 for this investment

These funds currently average a 6.8% annual return, which would gross me about $123,000 a year. I'm also optimistic that the underlying assets will continue to appreciate over time.

2. Maintain Cash Reserves

The remaining $200,000 would be kept in cash, invested in a money market fund that offers about 5% return. This strategy not only mitigates the risk of poor early market returns but also provides me with a relatively stable additional $10,000 a year.

3. Optimize Social Security Benefits

Finally, once I reach the age of 70, I would take full advantage of my social security benefits, which, as of today, would be approximately $48,000 a year pre-tax. I would also encourage you to evaluate your projected benefits at ages 62, 66, and 70 to help with your financial planning.

Utilizing these strategies can bring you one step closer to your retirement goals and ensure you maintain financial freedom.

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