Jim is planning to die.

And not at some ripe old age like 90 or 100, but just 75 years old.

At least that’s what his retirement plan indicates.

He saved up $1 million by age 55, but to retire he needs about $50,000 per year in addition to his pension to live the way he’s always dreamed.

If he retires now, 20 years down the road, that $1 million will be gone.

Many Americans can relate. They grind 40+ hours a week for years and save up, only to find that it’s not quite enough as they are approaching retirement.

Here at Intelligent Income Daily, our goal is to steer you toward financial freedom and the retirement you desire. And for those already in retirement, we want to increase your wealth and financial security with income-generating opportunities.

Jim is my best friend’s father. And today I am going to walk you through his story so that you can avoid one of the biggest mistakes of retirement – underestimating Americans’ ingenuity and your longevity.

Why $1 Million Dollars is No Longer Enough to Retire On

Now, although simple math would give Jim 20 years on $1 million dollars… it doesn’t account for all the crazy going on today.

If we were really going to crunch the numbers… we’d have to account for a lot more.

Inflation is raging, especially where Jim lives in Ohio.

Jim’s wages are up 15% in the last 3 years. But that doesn’t mean much given his bills.

His food bills are up 20%. And that doesn’t account for eating out, just groceries.

He also had to buy a new car recently, which cost him 23% more than his wife’s new car in 2019.

Think a used car would have helped? Nope, those are 29% more expensive today.

His electricity bill is up 26%, and his gas heating bill is up 32%.

Before the pandemic, it cost him $50 to fill his gas tank. Now it costs him almost $100.

For three straight years, inflation has raged higher, faster than his wages.

You get the picture…

$1 million is not going to cut it.

Don’t Underestimate Americans’ Ingenuity

As you can imagine, this has made Jim very angry… like I’m sure it has many other Americans.

All of the increased daily costs, combined with our country’s increasing deficit of $1.5 trillion, has convinced Jim that we’re headed for economic catastrophe within the next decade that will result in the world ending as we know it.

Or to put it another way, Jim doesn’t think there is a bright future ahead. And that’s why he wants to enjoy his money, “while I still can.”

He decided to retire and spend no more time building up his wealth and financial security.

While I sympathize with Jim, here is what he isn’t realizing.

The United States of America is not going anywhere. And neither is the rest of the world.

For almost 50 years now, we’ve had 60,000 nuclear missiles pointed at us and the rest of the world… and still we’ve managed to avoid nuclear war.

Yes, the U.S. government is a mess. But it was a mess in February of 2020 when the pandemic threatened 50% unemployment and a societal collapse… but within two weeks Congress passed the CARES (Coronavirus Aid, Relief, and Economic Security) Act for emergency relief.

It kept many families afloat that would not otherwise have been able to feed themselves.

People made masks from their homes. And businesses that previously had nothing to do with personal protective equipment (PPE), started manufacturing them for nurses and doctors on the front lines of the fight against the spread of COVID-19. 

Don’t underestimate American ingenuity.

Americans can and will adapt to whatever the future holds just as we did in the face of world wars and the recent pandemic.

So planning on the collapse of our country and the world as we know it, is not a great philosophy for your retirement portfolio.

Don’t Underestimate Your Body’s Longevity

It’s also not a great idea to base your portfolio on an early death.

Jim isn’t sick, at least not any more than most people. And he doesn’t smoke or drink like a fish.

He’s a lot healthier than most people. So why is he planning on dying in 75 years?

He shouldn’t be…

If you’re 65 today and ready to retire, your chance of living beyond 75 if you’re a male, is 84%. It’s even higher for women.

In fact, 85% of people who live to be 100 are women.

And to top it off, the average life expectancy has increased by over 30 years from 1900 to 2020.

So chances are, Jim and his wife will both be around more than 20 years from now.

And if you’re in the midst of planning out your retirement and/or building it up – don’t underestimate your body’s ability to live a long life. Plan for it.

Plan for a Long Life and Long Retirement

How do you do that?

By investing in income-generating growth stocks. It’s not enough to hope a share price goes up when you invest in a stock. You should be paid on a regular basis to own that stock. And it should constantly be growing.

That way whether the share price goes up or down, you are generating consistent returns just like another paycheck (for a job you don’t have to work at). 

And which are the best income-generating stocks? Dividend growth stocks.

I wrote all about them and how to secure a safe retirement on Monday. You can read the article here.

So today, I want to share with you one way to grow your wealth and increase your retirement fund.

It’s called the Schwab US Dividend Equity ETF (SCHD), and is a wonderful high-yield blue-chip ETF chock full of dividend growth stocks to increase your retirement portfolio.

SCHD is a 5-star gold-rated ETF according to Morningstar and is the gold standard of high-yield ETFs.

Its strategy starts with an essential sign of quality: dividend growth streaks, companies that have been paying and increasing their dividends for years.

This ETF includes the world’s best dividend stocks, like Broadcom, Amgen, UPS, Pepsi, Chevron, and Merck. These are companies with strong balance sheets, safe dividends, and growing profitability.

SCHD is a 4% yielding ETF whose earnings and dividends are expected to grow at 10% to 11%. That means long-term 14% to 15% annual returns.

That’s quadruple your money every ten years.

And right now, SCHD is trading at 12 times earnings. That’s a 25% historical discount. If this ETF goes up 33%, it will return to fair value. So it has plenty of room for growth ahead.

And if that excites you, members of our Intelligent Income Investor are enjoying dividends from an entire portfolio of dividend growth stocks.

One is yielding 8% – more than twice what SCHD offers. To learn more about Intelligent Income Investor and find out what this play is, click here.

Don’t plan to outlive your savings. Plan for a long life and a long retirement.

Safe Investing,

Adam Galas
Analyst, Intelligent Income Daily