Let's Talk Investing
How dividends beat GICs for seniors
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Dividend-paying stocks may not be for everybody, but seniors are one group of people for whom they are appropriate
Segment Two: How dividends beat GICs for seniors
-Rob, I want to begin by making the point that, attractive though they look, dividend-paying stocks are not for everybody. Seniors are one group of people for whom they are appropriate.
-provide some examples of how $1 of dividends leaves you with more on an after-tax basis than $1 of interest. (I guess you are referring to the dividend tax credit. I also want to make the point that the dividend tax credit is widely misunderstood. It does not constitute an additional benefit. All is does is prevent double taxation by giving the taxpayer credit for tax which the company has already paid on his behalf. The taxpayer should consider not just the tax that he pays directly but also tax deducted at source at the level of the company.)
-companies may increase dividends, providing inflation protection for investors (essentially, when you own stocks, you are an owner, when you own GICs, you are a creditor.)