Suze Orman’s Investment Plan That Every Retiree Needs to Copy

Core Insights - Financial expert Suze Orman advocates for a strategic shift towards dividend-paying stocks over traditional Treasury bonds, potentially increasing after-tax income by over 30% for retirees [2][3]. Investment Analysis - Orman's analysis shows that a hypothetical $100,000 investment in seven selected dividend-paying stocks could yield $4,304 in after-tax income annually, compared to $3,268 from a 10-year Treasury bond at 4.3%, resulting in an additional $10,360 over ten years [3]. - The favorable tax treatment of qualified dividends, taxed at capital gains rates rather than ordinary income rates, contributes to the higher after-tax income from dividend stocks [4]. Stock Recommendations - Orman recommends seven dividend-paying stocks with yields of 3.9% or higher: AbbVie (ABBV), AT&T (T), Prudential Financial (PRU), Fifth Third Bancorp (FITB), Sanofi (SNY), Williams Companies (WMB), and Amcor (AMCR), which average a 5.69% annual dividend yield [5]. - Emphasis is placed on conducting due diligence to ensure companies have sufficient free cash flow to support their dividends [6]. Risk Management - Orman addresses concerns about dividend cuts, arguing that dividend-paying stocks provide income during market downturns, unlike Treasury bonds that lock in rates [7]. - Quality dividend stocks often increase their payouts annually, providing a safety factor for investors [7]. Investment Strategy - Orman suggests a balanced investment approach, maintaining exposure to technology and growth stocks while using dividend stocks for income generation [8]. - For retirees, she recommends dollar-cost averaging and consulting financial professionals, cautioning against chasing excessively high yields [9].