There are many variables that can have a large impact on a person’s retirement plan. Today I want to take a look at two competing ideas and problems for most of us when it comes to securing our own retirement. I’m going to look at how big of an impact the following two variables have on a retirement plan: how much is saved each year vs. total returns on investments.

When I look for dividend paying stocks for the long run, a few of the characteristics I like to see are a reasonable dividend yield of at least 2.5%, a history of consistent dividend growth, and earnings that do not plummet every time there is an economic downturn. Procter & Gamble (PG) fits this bill perfectly.

This past week some comments by AIG CEO Robert Benmosche went viral as he said he expects the average retirement age to jump to age 80. This just added fuel to the fire of fear that many in their 50s and 60s already have. A case in point: More than half of all baby boomers fear running out of money in retirement more than they fear death. This is according to a study from Allianz Life. Yet nearly 36% of these same people do not know how long their funds will last once they do retire.

When I look for dividend paying stocks for the long run, a few of the characteristics I like to see are a reasonable dividend yield of at least 2.5%, a low payout ratio, low debt, and a strong dividend growth rate over the past five years. Although Microsoft has normally not been looked at for its dividends, it’s time investors being thinking differently about this company. With a 2.6% dividend yield, a 20% annual dividend growth rate over the past five years, a payout ratio of only 26%, and very little debt, Microsoft is poised to return strong dividends for years to come.

Have you heard the latest news on social security? The social security trust fund will be short on funds three years earlier than last projected. The retirement and disability fund is now projected by the Social Security Board of Trustees to be short on funds starting in 2033. By law this means that all of those who receive benefits will have their benefit payments cut by an amount necessary to restore the fund to solvency. This is across the board for everybody. Currently this amount is right around 25%.