We recently compiled a list of the Retirement Stock Portfolio: 7 Safe Dividend Stocks To Invest In. In this article, we are going to take a look at where AbbVie Inc. (NYSE:ABBV) stands against the other dividend stocks.

As investors near retirement, achieving financial stability becomes a top priority. Among the various investment choices, steady dividend payments hold particular appeal for their reliability and security. Dividends, which are a share of a company's profits distributed to shareholders, offer a dependable source of income.

Research shows a growing trend of Americans retiring earlier than expected, often due to circumstances beyond their control. According to a study by the Transamerica Center for Retirement Studies and the Transamerica Institute, 58% of workers retire earlier than planned. The most frequently cited reasons for early retirement include health-related issues, which account for 46%, followed by employment challenges at 43%, and family obligations at 20%. Interestingly, only 21% cited financial stability as the reason for early retirement. The median retirement age is now 62, falling three years short of the traditional retirement age of 65.

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Dividend stocks are becoming an increasingly important component of a well-diversified retirement portfolio for many investors. Carefully selected dividend-paying stocks can provide stability during market downturns and enhance returns during rallies by generating quarterly income that offsets losses and boosts gains. In addition, they can serve as a safeguard against inflation, which has become a growing concern due to rising food and energy costs. Some top-performing companies have consistently increased their dividend payouts year after year for decades. David Giroux, a portfolio manager at T. Rowe Price who manages the firm's capital-appreciation strategy, spoke about dividend stocks in one of his interviews with Barron's. Here are some comments from the analyst:

"To have a retirement portfolio that has a significant component of stocks with attractive dividends makes a tremendous amount of sense. If the average company in the market can grow its earnings at 7% to 8% a year, your dividends should be growing at a similar rate."

Analysts emphasize that while income and growth are essential for savers to sustain a potentially lengthy retirement, this strategy has its limitations and may not suit everyone. They recommend a portfolio diversified across various sectors and companies with substantial cash reserves to support stock buybacks. Dave King, a senior portfolio manager at Columbia Threadneedle Investments, highlighted in an interview with Barron's the importance of simple diversification. He suggested holding at least eight stocks from different sectors, noting that diversification doesn't need to be excessive but should include more than a few stocks -- ideally more than five, with one representing each broad sector. According to King, when selecting stocks for such a portfolio, it's important to avoid placing too much weight on Wall Street research. Instead, the focus should be on fundamental, historically proven factors like a company's credit rating or the reputation of its management, which can provide valuable insight into the reliability of its dividend payments.