Improve Your Retirement Income with These 3 Top-Ranked Dividend Stocks

Here’s an eye-opening statistic: Older Americans are more afraid of running out of money than they are of death itself.

This concern among seniors is valid, even if they are conscientiously saving for their golden years. That’s because the traditional way people manage their retirement may no longer provide enough income to meet expenses—and as people generally live longer, major retirement savings are being depleted prematurely during retirement.

Over the years, bonds or other fixed-income assets can generate the yield needed to provide stable income for retirement needs. However, those yields have gradually declined over time: the 10-year Treasury rate in the late 1990s was around 6.50%, but today, that rate is a thing of the past, and there is little chance of a comeback in the foreseeable future.

The impact of falling interest rates is huge: Over 20 years, a $1 million investment in the 10-year Treasury note has seen a change in the yield of more than $1 million.

Falling bond yields aren’t the only potential problem seniors face. Today’s retirees also don’t feel as secure as they once did when it comes to Social Security. Welfare checks will still be going out for the foreseeable future, but Social Security will run out of money by 2035, according to current estimates.

Unfortunately, it appears that the two traditional sources of retirement income—bonds and Social Security—may not adequately meet the needs of current and future retirees. But what if there was another option that could provide a steady, reliable source of income in retirement?

Dividend-paying stocks from low-risk, high-quality companies are a smart way to generate a stable, reliable, attractive income stream as an alternative to low-risk, low-yielding Treasuries and bond options.

Look for stocks that have paid steady and increasing dividends for years (or decades), and that haven’t had their dividend cut even during a recession.

In addition to those familiar names, you can find great dividend stocks by following a few guidelines. Look for companies with dividend yields around 3% and positive annual dividend growth. Growth rates are key to helping combat the effects of inflation.

Here are three dividend-paying stocks retirees should consider in their savings portfolio.

Franklin Resources (BEN) It currently pays a dividend of $0.33 per share, with a dividend yield of 5.29%. In comparison, the Financial Investment Management industry’s return was 1.62% and the S&P 500’s return was 1.39%. The company’s annualized dividend growth rate over the past year was 3.23%. View Franklin Resources dividend history here >>>