Dividend Income Versus Total Return: Which Is Right for Retirees?

Chasing high dividend yields in retirement can increase risk and reduce diversification.

Dividend income may feel safer, but payouts can shrink or disappear during market downturns. TukuYoTuku/Shutterstock

When it comes to retirement savings strategies, many investors either take the dividend income approach or the total returns path.

The idea behind dividend investing is to generate enough income through dividends to cover immediate needs in retirement, without having to sell shares within your portfolio.