Social Security recently announced the biggest increase to monthly payments in about 40 years, with a rise of nearly 6%.

That's got to be great news for recipients, especially considering that over the last 10 years, no annual increase has exceeded 3%. In 2015, there was no increase at all.

That highlights one of the toughest things about retirement; creating an income that keeps ahead of inflation.

But Social Security isn't the only game in town. There are other ways to achieve growing income. Example? Dividend stocks.

If you're not familiar with companies that pay dividends, you should be. Dividends are simply a share of a company's profits, typically sent out every three months.

While there are no guarantees, some companies have been paying dividends literally for decades without missing a beat, as well as increasing them every year.

Take 3M, for instance; the industrial conglomerate. 3M has increased its regular dividend every year for more than 50 years. In 1989, they were paying 32 cents a share. Last year? $5.88. That's a compound annual growth rate of 10%. That's way better than Social Security has delivered. And, dividends, unlike the pathetic interest you earn at the bank, can get favorable tax treatment. Rather than rates as high as 37%, qualified stock dividends are taxed at a rate from zero to a maximum of 20%.

So now you see what attracts income investors to dividend stocks: a tax-advantaged retirement income that has the potential to increase. And here's more icing on the cake. Your principal can also rise. In 1989, 3M was going for about 20 bucks a share. Now it's more than $180. No bank account produces returns like that.

Of course, there's no free lunch. There's always risk when investing in any stock, no matter how high the quality. To minimize that risk, you've got to learn some fundamentals.

That's what this week's "Money!" podcast is about. We're going to talk about how to find the best dividend stocks, step by step. And we're going to do it without making your eyes glaze over.

As usual, my co-host will be financial journalist Miranda Marquit. Listening in and sometimes contributing is producer and novice investor Aaron Freeman.

Social Security <a href="https://www.moneytalksnews.com/2020-social-security-cola/">recently announced</a> the biggest increase to monthly payments in about 40 years, with a rise of nearly 6%.
That's got to be great news for recipients, especially considering that over the last 10 years, no annual increase has exceeded 3%. In 2015, there was no increase at all.
That highlights one of the toughest things about retirement; creating an income that keeps ahead of inflation.
But Social Security isn't the only game in town. There are other ways to achieve growing income. Example? Dividend stocks.
If you're not familiar with companies that pay dividends, you should be. Dividends are simply a share of a company's profits, typically sent out every three months.
While there are no guarantees, some companies have been paying dividends literally for decades without missing a beat, as well as increasing them every year.
Take 3M, for instance; the industrial conglomerate. 3M&nbsp;has increased its regular&nbsp;dividend every year for more than 50 years. In 1989, they were paying 32 cents a share. Last year? $5.88. That's a c<a href="https://www.forbes.com/sites/greatspeculations/2021/09/08/analyzing-3m-companys-dividend-growth-potential/">ompound annual growth rate of 10%</a>. That's way better than Social Security has delivered. And, dividends, unlike the pathetic interest you earn at the bank, can get favorable tax treatment. Rather than rates as high as 37%, qualified stock dividends are taxed at a rate from zero to a maximum of 20%.
So now you see what attracts income investors to dividend stocks: a tax-advantaged retirement income that has the potential to increase. And here's more icing on the cake. Your principal can also rise. In 1989, 3M was going for about 20 bucks a share. Now it's more than $180. No bank account produces returns like that.
Of course, there's no free lunch. There's always risk when investing in any stock, no matter how high the quality. To minimize that risk, you've got to learn some fundamentals.
That's what this week's <a href="https://www.moneytalksnews.com/podcasts/">"Money!" podcast</a> is about. We're going to talk about how to find the best dividend stocks, step by step. And we're going to do it without making your eyes glaze over.
As usual, my co-host will be financial journalist <a href="https://www.moneytalksnews.com/author/mirandamarquit/">Miranda Marquit</a>. Listening in and sometimes contributing is producer and novice investor <a href="https://www.moneytalksnews.com/author/aaronfreeman/">Aaron Freeman</a>.

Welcome to Money Talks News: The Podcast, a podcast devoted to everything money: how to get it, how to grow it and how to keep it. From the creators of MoneyTalksNews.com, a leading source of personal finance news and advice since 1991.

Welcome to Money Talks News: The Podcast, a podcast devoted to everything money: how to get it, how to grow it and how to keep it. From the creators of MoneyTalksNews.com, a leading source of personal finance news and advice since 1991.

Money Talks News: The Podcast

How to Find the Best Dividend Stocks, Step by Step

https://api.omny.fm/orgs/67ee9ddc-11a3-4cec-841d-ac9a015d5b41/clips/c13bb903-3471-4904-b634-adda0142b0f8/transcript

Transcript

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