UBCNews - Business - Can You Retire on Dividends & Annuities? An Oklahoma Expert Analyses The Odds

Episode Date: January 7, 2026

So, can you actually retire comfortably in Tulsa using just dividends and annuities? It's a question a lot of folks nearing retirement are asking themselves, especially with pensions becoming so rare these days. Melia Advisory Group City: Tulsa Address: 5424 S Memorial Dr Website: https://www.meliagroup.com/

So, can you actually retire comfortably in Tulsa using just dividends and annuities? It's a question a lot of folks nearing retirement are asking themselves, especially with pensions becoming so rare these days. It's definitely possible, and Tulsa makes it even more attractive because of the lower cost of living. You know, independent living costs in Tulsa can be quite manageable compared to other cities. When you pair that with a smart income strategy, dividends and annuities can absolutely work together to create a real estate. reliable cash flow. Right, so let's break that down. Why should someone consider dividends as part of their retirement income plan?

Well, dividends offer something really valuable, predictability. When you own shares in solid dividend-paying companies, you get quarterly payments. It's like having a paycheck in retirement. And here's the key. You're living off those dividend payments without touching your principal balance, which helps your savings last longer. That preservation piece is huge, so you're not constantly selling off assets to cover expenses. Exactly. And another benefit is that dividend-paying stocks tend to be from high-quality,

profitable companies, think blue-chip names with long histories of paying dividends. Companies like Procter & Gamble and General Mills have a long history of paying dividends, with records going back over 100 years. That track record gives retirees confidence. Umem, interesting, but are there risks we should talk about? Oh, definitely. One risk is lack of diversification. If your portfolio is too heavily weighted in large-cap dividend stocks, you might miss out on growth from smaller companies during strong economic periods.

And here's something people forget. Dividends can be cut. During the financial crisis of 2008 through 2009, the S&P 500 experienced in approximate 23% cut in dividends. Wow, that's a significant drop. So dividends aren't guaranteed. Right. They depend on the financial health of the company and the overall economy.

Bank of America, for example, cut its dividend by 50% in October 2008 during the financial crisis. The CEO at the time said those were the most difficult times he'd experienced in 39 years of banking. I actually remember talking to a client back then who was frustrated because her dividend checks kept shrinking. It was a tough conversation, but it really drove home the importance of diversification. That's a sobering reality check. So, uh, how do annuities fit into this picture? Annuities are designed to address one of the biggest fears retirees have, outliving their savings. They can offer guaranteed income for life, which provides that baseline security. You can structure them with different payout options, lifetime income, joint and survivor income for couples,

or period certain income that pays for a set number of years. So they're kind of like building your own pension, though I guess you could say annuities are what happens when insurance companies try to make pensions cool again. Huh, that's one way to put it. And annuities also offer tax-deferred growth. Your investments grow without being taxed until you start making withdrawals,

which can help your money compound over time. That point about tax-deferred growth sets up our next piece, the long-term stability annuities can provide, but first a quick word from our sponsor. Planning for retirement in Tulsa means understanding how to turn your savings into sustainable income. Malia Advisory Group specializes in retirement planning, IRA management, estate planning, and social security analysis. They focus on income-producing strategies designed to help you prepare for the financial realities of retirement, whether you're nearing that stage or already there. If you're considering dividend and annuity strategies to build reliable cash flow, learn more at meliagroup.com.

Picking up on tax-deferred growth, how does that long-term stability actually play out with annuities over the years? Well, innuities are designed as long-term instruments. The tax-deferred feature means your money can grow faster because you're not paying taxes annually on gains. And when paired with guaranteed lifetime income, you essentially remove the tax. the guesswork about whether your money will last 30 or 40 years into retirement. In other words, you're taking the uncertainty out of the equation, making sure your money is there when you need it. But I'm guessing there are trade-offs. Absolutely. Innuities can be complex, and they often come with fees, administrative fees, mortality and expense risk charges, and surrender charges

if you need to withdraw money early. Those fees can eat into your returns, and there's limited liquidity. If your financial situation changes and you need cash before the surrender period ends, you'll face penalties. I see that's tricky, so flexibility is limited. Right. And while annuities provide security, they may offer lower returns compared to stocks or mutual funds. There's also inflation risk. Unless your annuity is inflation protected, the purchasing power of those payments can decline over time. So how do you balance these two, dividends and annuity? into one cohesive strategy. It really comes down to creating multiple income streams.

Annuities give you that guaranteed foundation, covering your essential expenses. Dividends then provide additional cash flow that can handle discretionary spending and give you some upside potential through stock price appreciation. When your income comes from dividends, you don't need to sell shares during a market downturn, which protects your long-term wealth. That makes sense, using each tool for what it does best. Have you ever wondered how much income you'd actually need to generate from these sources in Tulsa? Great question. Let me give you an example. If you have a million-dollar portfolio invested in dividend-paying stocks with an average yield of around 3.1 percent, you'd generate about $31,000 per year in dividend income. That's roughly $7,750 per quarter.

Pair that with an annuity providing guaranteed baseline income, and you've got a pretty solid foundation. And that's before factoring in Social Security, right? Exactly. Oklahoma offers tax advantages for retirees, including an income tax exemption of up to $10,000 for those 65 and older, and Social Security benefits are not taxed. Note that income limitations may apply for the full exemption, those perks can stretch your retirement dollars even further. So to everyone listening in the Tulsa area,

what's the first step if you're considering this kind of income-first, strategy. Start by assessing your overall financial goals and your expected expenses in retirement. Look at your life expectancy, other income sources like social security, and how much risk you're comfortable taking. Then work with a financial advisor who understands income-focused planning to structure a portfolio that balances dividends and annuities in a way that fits your specific needs. And it's worth emphasizing, there's no one-size-fits-all approach here. Definitely not. Every person's situation. is different. The beauty of combining dividends and annuities is the flexibility to customize your income stream.

You can adjust the mix based on your comfort with market exposure, your need for liquidity, and how much guaranteed income you want versus growth potential. This has been such a practical conversation. Before we wrap up, what's one thing you'd want listeners to remember about retiring on dividends and annuities in Tulsa? I'd say remember that both strategies are about creating sustainable income, not just accumulating assets. The goal is transforming your savings into reliable cash flow that supports your lifestyle. Tulsa's affordable cost of living gives you an advantage,

but the key is planning ahead and understanding both the benefits and the limitations of each approach. Perfect way to sum it up. Thanks so much for breaking this down with us today. My pleasure. Thanks for having you.