If you're a retiree (or nearing that point), dividend stocks are likely to be on your mind. Interest income earned on bonds is nice to be sure. But, in that these interest payments are fixed and bonds don't offer any capital appreciation, they're not always an ideal retirement holding. Only stocks offer potential dividend growth as well as price growth.

The problem? Picking the right dividend stocks can be difficult. Locking on to the wrong one creates a risk of shrinking your retirement nest egg at a time when you are trying to reduce risk.

There's a much simpler solution. Why not buy a basket of dividend-paying stocks that professionals manage and update as necessary?

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Source Fool.com