As readers of this blog know, I am a big fan of dividend reinvestment.
To my mind, it is a simple, easy, and painless way to increase one’s assets. For a vast majority of my portfolio, I use dividend reinvestment.
If I do not need the dividend cash, I just let the reinvestments accumulate. Each dividend issued increases my share count automatically, which leads to higher dividends the next issuance.
In an earlier post, we asked if it is ever “too late” to start dividend investing. After all, since time is the major factor involved in whether dividend investing is beneficial, it might not be a factor for everyone.
An example in that post mentioned the oldest person known to have lived in modern times, a Jeanne Calment, who lived to 122 years old. Most people will not have the opportunity to live that long, so using her as an example is a stretch. The average life expectancy in the U.S. for 2025 is 79.4 years.
A similar question might be asked regarding the dividends that have compounded, most for years. At my current age, I don’t foresee needing the most of the cash from the dividends, but should I need the cash, I can always turn off reinvestment.
Barring a need for dividend cash, I have choices. Do I let reinvestment continue and leave it all for my heirs? Or at some point dial down reinvestment and start using the dividend cash for any particular purpose?
Given the 79.4 years expectancy, and given no pressing need, I would consider turning off some reinvestment some time in the later years. While life expectancy is 79.4 years, that is not a figure for everyone. No one can assume he or she will live that long, it is just an average.
And since many will live longer, having enough cash to live on becomes seriously important. So maintaining or even increasing one’s income over time, even past the average expectancy is something that should be considered.
How is your planning for your future? Let me know here.
The woodblock print Numazu (a city in Japan) by Hiroshige Andō was created between 1838-1844. Courtesy Ukiyo-e.org and the Library of Congress.
The post When and If To Stop Dividend Reinvestment
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