I’m 45 with a $200K sum I want to invest so I can retire by 67 with $100K/year. Should I focus on dividends or growth?

Core Insights - The article discusses the financial planning of an individual named Devon, who has received a $200,000 windfall and is considering how to invest it for retirement, aiming for $100,000 a year in passive income by age 67 [5][10]. Investment Strategy - Devon's investment strategy should involve a mix of stocks and bonds, with a heavier allocation to stocks in the early years and a shift towards more stable assets like bonds as retirement approaches [6][16]. - A conservative estimate of a 7% return on the $200,000 investment over 22 years would result in approximately $886,000, which may not be sufficient to generate the desired $100,000 in passive income solely from investment returns [7][10]. Passive Income Sources - The article highlights that a diversified portfolio could yield a dividend income of around $44,000 annually, assuming a 5% yield on the $886,000 portfolio [9]. - Social Security benefits are also a significant component of passive income, with projections estimating a monthly benefit of $5,785 in 22 years, leading to an annual income of about $69,430 [9][10]. Retirement Planning Considerations - The average retirement savings for Americans aged 45 to 54 is reported to be $115,000, indicating that Devon's financial situation is relatively favorable compared to her peers [3]. - Inflation poses a risk to retirement income, but Social Security benefits are adjusted for cost-of-living increases, which can help mitigate this risk [11][12]. Investment Types - The article contrasts value stocks, which typically provide higher dividends and stable growth, with growth stocks, which focus on rapid growth but often pay little to no dividends [13][14]. - A balanced approach that includes both value stocks and bonds is recommended for generating passive income while maintaining portfolio stability during retirement [15][16].