The size of your nest egg matters less than the yield you chase, and picking the wrong number could leave your income flat while prices keep climbing through your 80s.<\/p>\n
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A 70-year-old seeking an extra $3,600 a month\u00a0beyond\u00a0Social Security<\/a> needs a portfolio that generates $43,200 a year. For most retirees, that is more than their government checks. This means that the average retired worker will collect about $2,170 a month after the 3.6% cost-of-living adjustment that takes effect in 2027. As a result, one equation does all of the heavy lifting here when you take annual income divided by yield equals the amount to invest.<\/p>\n Conservative Tier: Roughly $1.23 Million at 3.5%<\/p>\n Go with a conservative level of investing, which means taking $43,200 divided by 0.035, or about $1,234,000.<\/p>\n Dividend growth funds, broad dividend ETFs, and Treasury bills<\/a> fill this level. Schwab US Dividend Equity ETF (NYSEARCA:SCHD<\/a>) yields about 3.0% on a trailing payout of $1.05 a share. Vanguard High Dividend Yield ETF (NYSEARCA:VYM<\/a>) yields closer to 2.3% and spreads your money across hundreds of large dividend payers. iShares 0-3 Month Treasury Bond ETF (NYSEARCA:SGOV<\/a>) pays about 3.6%, while T-bills currently yield between 4% and 4.5%.<\/p>\n The tradeoff: this approach requires the largest upfront investment, and in return, your income is least likely to be interrupted. The stocks in these funds tend to raise their dividends over time. T-bill income works differently. SGOV\u2019s monthly payout dropped from $0.458 in early 2024 to $0.30 this month as short-term rates came down.<\/p>\n Moderate Tier: $720,000 at 6%<\/p>\n At a more moderate level, $43,200 divided by 0.06 equals $720,000. REITs, preferred shares and covered call funds<\/a> make up this level. Realty Income (NYSE:O<\/a>) yields about 5.7%, pays every month, and recently made its 115th consecutive quarterly dividend increase. The increases are modest, though. Its monthly distribution rose from $0.264 in January 2025 to $0.2715 today.<\/p>\n JPMorgan Equity Premium Income ETF (NYSEARCA:JEPI<\/a>) sells call options on its stock holdings to generate income. It yields about 8% on trailing payouts and about 7.2% based on its current run rate, with a 0.35% expense ratio. Its checks change from month to month: $0.448 a share in May, then $0.341 in October. Selling calls also caps the fund\u2019s upside, so over a long retirement this income is less likely to keep up with inflation.<\/p>\n Aggressive Tier: $432,000 at 10%<\/p>\n