Which is why you need to invest in the right stocks which gives you good dividends. As the companies grow, the dividends will grow to exceed inflation. Another way is to ensure your passive income exceeds your expenses so that you will have savings to reinvest by buying more dividend stocks and hence giving you higher dividends. For instance if your passive income is $7k pm, then spend only $3k pm in your retirement. Don't be a fool by maintaining a car and having a maid. If you want to maintain your lifestyle while working, then work until you drop dead at your cubicle.
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Originally Posted by Unregistered
He is sad for the wrong reason - that his household was categorised as below the median household income group.
There is a more important thing to worry about here - that of increasing median household income.
For those who are retired or planning for retirement, they must ensure that their passive income can catch up with the rising median incomes. With rising incomes, this will translate to higher cost of living. So if your passive income falls below the median income, there is every likelihood that you will need to draw down your principal savings.
Drawing down from your savings will trigger a vicious cycle of reduced passive income and increased draw down of your savings. In time, your savings will run out. On the other hand if your passive income can catch up with the median incomes, the likelihood of not touching your savings is higher, and you can outlive your savings.
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