Generating $5,300 a month in retirement without drawing down principal requires capital, yield, and a plan. One 78-year-old has built that income stream around just three tickers, and each one represents a fundamentally different approach to the same goal.
According to a report by Yahoo Finance, the $63,600 annual income that portfolio produces can be broken into three tiers based on yield, risk, and capital required.
The most conservative option is the Schwab U.S. Dividend Equity ETF, known by the ticker SCHD. The fund trades around $35 per share with an annualized forward distribution of $1.01 per share, putting its current yield near 2.9%. Its largest holdings include QUALCOMM, Texas Instruments, UnitedHealth Group, Coca-Cola, Merck, and Chevron, companies that have historically grown their dividends over time.
At a 2.9% yield, producing $63,600 in annual income requires roughly $2.19 million in capital. Using a more typical historical SCHD yield of 3.5% brings that figure down to about $1.82 million. The fund has returned 244% over the past ten years on a total-return basis, and its dividends have grown by roughly 8% annually. Distributions from SCHD are taxed at long-term capital gains rates, which is an advantage over other income vehicles.
The middle-tier option is NNN REIT, a real estate investment trust that owns single-tenant commercial properties under long-term net leases. Occupancy currently sits at 99%, and the weighted average lease term is 10.1 years. The board recently raised the quarterly dividend to $0.62, which annualizes to $2.48 per share. That increase marked the 37th consecutive annual dividend raise for the company.
With shares trading near $46, NNN's current yield sits around 5.4%. At that rate, generating $63,600 per year requires approximately $1.18 million in capital. Second quarter 2026 core funds from operations rose 6% to $0.89 per share, and the AFFO payout ratio stayed near 67%, which provides cushion for the dividend to continue. NNN distributions are taxed as ordinary income, partially offset by the 20% qualified business income deduction available to REIT investors. Dividend growth typically runs 3% to 4% annually, slower than SCHD's history but at a yield that requires far less starting capital.
The highest-yield option in the trio is Hercules Capital, a business development company that lends to venture-backed technology and life sciences firms. Hercules pays a quarterly distribution of $0.47 per share, composed of a $0.40 base payment plus a $0.07 supplemental distribution, which annualizes to $1.88.
The higher yield on Hercules compresses the capital requirement significantly compared to SCHD, making it attractive for retirees who need income now rather than in the future. The tradeoff is greater risk, since the company's borrowers are venture-stage businesses that carry more uncertainty than the blue-chip dividend payers inside SCHD or the long-leased properties inside NNN.
The three-ticker approach shows that the same income target can be reached with very different amounts of starting capital, very different tax treatment, and very different risk profiles. A retiree choosing between them is essentially choosing between principal preservation, current income, and yield maximization.
