The Top Dividend Plays For Retirees (DVY)

From Tony Sagami: The economy added 222,000 new jobs in June, per the most-recent jobs report. That was the biggest increase since February. On top of that, the unemployment rate fell to 4.4%, from 4.7% at the beginning at 2017.

The stock market was pretty impressed by the top-line numbers. But there’s a little-noticed trend taking place in the U.S. labor force. If you dig just a little bit deeper, you’ll see the dramatic increase in the number of senior citizens (age 65-plus) who are still working.

How dramatic? Well, the percentage of seniors who are working is at a 55-year high! 

Get this:

  • 32% of Americans age 65 to 69 are still working.
  • 19% of 70- to 74-year-olds are working, up from 11% in 1994.

I’ll turn 61 in September, so I’m just a few years shy of the traditional retirement age. However, I plan on working for many, many more years. I really enjoy my work, and my vegetable-farm upbringing just won’t let me not work.

Heck, our founder Martin Weiss is on the tail end of his 60s. And he puts me to shame with the vast number of hours he works!

Hey, we’re not complaining. Martin and I are lucky because we truly love what we do. And it’s great to see that we have lots of gray-haired company, as more and more Americans feel just like we do about staying productive.

A third of Americans expect to keep working past the traditional retirement benchmark of 65.

  • 22% plan to retire between 66 and 70 years of age.
  • 7% are going to wait until their early 70s.
  • 3% won’t quit until age 75, and 8% plan on working until they die.

Nearly 20% of Americans 65 and older were in the labor force last year. That’s up from 16% in 2007 and 10.8% in 1985, according to the Labor Department.

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The Bureau of Labor Statistics (BLS) expects that number to keep growing. It estimates that 36% of 65- to 69-year-olds will be working by 2024.

And if you include part-time work, that number jumps to a whopping 79%, according to the Employee Benefit Research Institute.

Why are Americans working so deep into their golden years? A number of factors come into play.

What is truly ironic is that Americans over 65 are working more than Americans under 65! Men ages 21 to 30 years old worked 12% fewer hours in 2015 than they did in 2000. Nearly 15% of young men worked zero weeks in 2015, a rate nearly double that of 2000.

People are living longer than previous generations. Some, like me, truly enjoy their jobs. And others just want to stay active.

However, a big percentage of working seniors say they have to work:

  • 48% cite medical issues.
  • 44% want to pay off debt.
  • 39% blame the high cost of their mortgage.
  • 37% help family members.
  • One-third cited a bout of unemployment.

The U.S, by the way, isn’t the only place people are planning to work longer. Around the globe, workers of all ages are moving their retirement goals later and later in life.

No question: People are living longer and healthcare costs are rising, so retirement is more-expensive than ever. But a glance at the above chart shows that one big driver of senior citizens working is the decimation that bear markets wreak on Americans’ savings.

Worse yet, most haven’t saved enough to finance retirement.

Some 30% of Americans have no retirement savings. And of the 68% who do, 30% have less than $100,000 while 34% have between $100,000 and $500,000.

Is there an investment opportunity hidden in this trend for Americans to keep working well into their retirement years?

You bet!

I’m talking about the growing demand for income-producing assets, such as real estate, dividend-paying stocks, and bonds.

In fact, the last two stocks that I recommended in my Disruptors & Dominators newsletter are exactly those type of stocks. They offer fat dividends that should be core holdings for every aging baby boomer who would enjoy spending their golden years on the golf course instead of behind a desk.

Get this: A whopping 10,000 Americans turn 65 years old EVERY day. So the opportunity … and the potential payoff … is huge.

The iShares Select Dividend ETF (NYSE:DVY) was unchanged in premarket trading Wednesday. Year-to-date, DVY has gained 5.45%, versus a 10.92% rise in the benchmark S&P 500 index during the same period.

DVY currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #4 of 76 ETFs in the Large Cap Value ETFs category.

This article is brought to you courtesy of Money And Markets.