58-Year-Old Retiree Living Off Dividends: Top 12 Stocks and ETFs

At 58, our retiree has mastered the art of living off dividends. His portfolio, a mix of top dividend stocks and ETFs, generates an average yield of 3.5% and an annual income of $42,000. Let's dive into his strategy and the top 12 investments that make it possible.


1. **Schwab U.S. Dividend Equity ETF (SCHD)**: This ETF, with a 3.4% yield, invests in high-yielding stocks of quality companies with a consistent record of paying dividends. It has returned an annualized 12.6% over the past five years.
2. **Vanguard Dividend Appreciation ETF (VIG)**: VIG has a 2.5% yield and focuses on companies that have increased their dividends for at least 10 consecutive years. It has returned an annualized 11.63% over the past five years.
3. **SPDR S&P Dividend ETF (SDY)**: SDY has a 2.4% yield and invests in stocks that have increased their dividends for at least 20 consecutive years. It has returned an annualized 9.85% over the past 10 years.
4. **Realty Income Corp (O)**: A REIT with a 4.05% yield, O has consistently increased its dividend, providing a stable income stream.
5. **Kite Realty Group (KRG)**: Another REIT, KRG has a 4.05% yield and has shown consistent dividend growth.
6. **Microsoft (MSFT)**: With a 0.8% yield, MSFT offers growth potential and has increased its dividend for 17 consecutive years.
7. **Johnson & Johnson (JNJ)**: JNJ has a 2.6% yield and has increased its dividend for 59 consecutive years.
8. **Procter & Gamble (PG)**: PG has a 2.6% yield and has increased its dividend for 65 consecutive years.
9. **Coca-Cola (KO)**: KO has a 3.2% yield and has increased its dividend for 59 consecutive years.
10. **AT&T (T)**: T has a 7.7% yield and has increased its dividend for 37 consecutive years.
11. **Vanguard High Dividend Yield ETF (VYM)**: VYM has a 2.8% yield and invests in high-dividend stocks. It has returned an annualized 10.24% over the past five years.
12. **iShares Core Dividend Growth ETF (DGRO)**: DGRO has a 2.4% yield and focuses on dividend growth stocks. It has returned an annualized 10.55% over the past five years.


The retiree's portfolio balances risk and return by diversifying across various sectors and asset classes, with a focus on income-generating investments. This approach allows him to maintain a comfortable retirement lifestyle while managing the risks associated with market fluctuations.

The retiree employs a dividend reinvestment strategy to grow his portfolio over time. By reinvesting a portion of his dividend income into additional shares, he takes advantage of market fluctuations and buys more shares when prices are low, ultimately increasing his income stream.

In conclusion, our 58-year-old retiree's income-focused strategy, centered around top dividend stocks and ETFs, provides a stable income stream and the potential for capital appreciation. By diversifying his portfolio and reinvesting dividends, he has successfully created a retirement income plan that stands the test of time.