What are the risks of this strategy?

Risks include stock price volatility, potential dividend cuts, and inflation eroding purchasing power.

Is this strategy suitable for all retirees?

It suits those seeking steady income, but requires diversification and financial advice to match individual needs.

What are the best stocks for retirement income?

Stocks like JNJ and VZ are known for stable dividends, but diversification across sectors is recommended.

How to Use Dividend Stocks to Pay Your Utility Bills in Retirement

This article outlines a strategy for retirees to cover their monthly utility bills (averaging $400) by investing in dividend-paying stocks such as JNJ and VZ.

June 27, 2026

2 min read

Source: 24/7 Wall St.

Key Numbers

monthly utility cost

400

annual utility cost

4800

Utility bills (electricity, water, internet, phone) are unavoidable expenses for retirees, averaging around $400 per month ($4,800 annually). But can they be covered entirely by investment returns? The answer is yes, through a strategy focused on stable dividend stocks.

Details

The idea is to buy shares of companies with a long history of stable dividend payments, such as Johnson & Johnson (JNJ) and Verizon (VZ). You need to calculate the capital required to generate $400 monthly ($4,800 annually) based on each stock's current dividend yield.

For example, if JNJ's dividend yield is around 3%, you would need to invest about $160,000 to generate $4,800 annually. If VZ's yield is higher (around 6.5%), the required capital would be lower (about $73,846).

Context

This strategy suits retirees seeking steady income without selling shares. However, it carries risks, such as stock price volatility and potential dividend cuts. Inflation may also erode the purchasing power of fixed income.

What This Means for Investors

Investors can use this method as part of a retirement income portfolio, with diversification to mitigate risks. Consulting a financial advisor is recommended to determine the appropriate amount based on individual needs.

Frequently Asked Questions

It depends on the dividend yield. For $400 monthly from a 3% yield stock, you need $160,000; from a 6.5% yield stock, about $73,846.

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This article was rewritten in Wrqti's editorial style based on information from the original source above. Content is informational only — not investment advice.