A $750K Portfolio Can Outpace Average Social Security Income

A $750,000 income-focused portfolio can generate annual returns exceeding the average Social Security benefit for retired workers, which stands at roughly $23,700 per year, according to a report from 24/7 Wall St. The question is not whether the portfolio can outproduce the average benefit, but how much risk must be taken to achieve that.

Details

Depending on asset allocation and stock selection, a portfolio invested in high-dividend stocks such as Johnson & Johnson (JNJ), Procter & Gamble (PG), Lowe's (LOW), and AT&T (T) could yield between 3% and 5% annually, producing income ranging from $22,500 to $37,500 per year.

Context

With the average Social Security check at $23,700 per year, a portfolio yielding just 3.2% would match that income. Higher yields typically require taking on more risk, such as investing in higher-dividend stocks or high-yield bonds.

What This Means for Investors

Investors looking to supplement or replace Social Security income can build a diversified income portfolio with moderate risk. Diversification across sectors like healthcare, consumer staples, and communication services can provide stable income. However, inflation and market volatility should be considered in long-term planning.