Forget Social Security: 5 High-Yield Stocks Retirees Are Buying Instead
Social Security raises are locked to a government formula, but a growing number of retirees are routing their income strategy around it entirely, and the stocks they are buying span five very different industries.
Social Security’s next raise is set by formula, and the 2027 cost-of-living adjustment is tracking toward 3.3%. Retirees want income that can grow faster. In some cases, they want it to arrive monthly, so they are turning to quality dividend payers whose boards raise payouts out of growing cash flow. The five names below come from five different industries. Each was screened on dividend safety first. Yield came second, using payout coverage, free cash flow, leverage, and a verified record of payments.
Verizon Communications: Ultra-High-Yield Income With Free Cash Flow Rising
Verizon Communications (NYSE:VZ | VZ Price Prediction) pays an annualized forward dividend of $2.83 per share. At the current price of $42.62, that works out to a forward yield of 6.64%, putting Verizon in ultra-high-yield territory.
Dividend safety: The payout equals about 57% of the low end of management’s raised full-year adjusted EPS guidance of $4.99 to $5.04. Cash coverage is stronger still. Management guides to free cash flow of $21.94 billion to $22.14 billion, while the dividend costs roughly $11.76 billion a year on the current share count. Second-quarter free cash flow reached $6.43 billion, up 27.1%. Leverage moved higher after the Frontier deal. Net unsecured debt to adjusted EBITDA stood at 2.5x, up from 2.2x at the end of last year. Verizon’s payment history shows 15 consecutive annual increases through 2025, and this year’s raise lifted the quarterly payout to $0.7075 from $0.69.
Bull case: The wireless business is improving. Verizon added 184,000 postpaid phone subscribers versus a loss of 9,000 a year earlier, and churn improved to 0.92% from 0.97%. Fiber connections reached 10.9 million, up 43.3%. At a forward P/E of 9, Verizon pairs its ultra-high yield with a low multiple.
Risk: SpaceX’s planned U.S. mobile network gave Verizon its worst day since 2002, and the shares are down 12.86% over the past month. Satellite competition could pressure pricing over time.
Altria: A Cash Machine Still Raising Its Payout
Altria (NYSE:MO) carries an annualized forward dividend of $4.44. At $72.01 per share, the forward yield is 6.17%, another ultra-high-yield payer.
Dividend safety: The dividend takes about 79% of the low end of 2026 adjusted EPS guidance of $5.61 to $5.72. That is a high ratio, but tobacco needs little reinvestment: capital spending guidance is just $375 million to $450 million. In the first half, Altria returned about $3.9 billion through dividends and buybacks. Stockholders’ equity sits at negative $2.618 billion, a product of years of buybacks. The latest declaration raised the quarterly payout from $1.06 to $1.11. That continues a step-up pattern that runs from $0.84 in the 2019 to 2020 period, with quarterly payments on record back to 1999.
Bull case: Pricing power keeps margins very high, with a trailing operating margin of 76.4%. Revenue still grew 1.3% in the second quarter, and the stock trades at a forward P/E of 12. Shareholders have also gained 30.95% year to date before dividends.
Risk: Volume is shrinking. Domestic cigarette industry volume fell 5%, and Marlboro’s retail share slipped to 39.5%. Future raises depend on price increases outpacing that decline.
AbbVie: Lower Starting Yield, Fastest Dividend Growth
AbbVie (NYSE:ABBV) has the lowest yield in this group: an annualized forward dividend of $6.92 against a price of $279.30, or 2.48%. It earns its place through coverage and growth.
Dividend safety: The payout equals roughly 50% of the low end of adjusted EPS guidance of $13.87 to $14.07, the most room of the five. Net debt to EBITDA is 2.26x and interest coverage is 6.94x. Management says it is “committed to achieving a net leverage ratio of two times within two to three years following the deal close.” That applies to Apogee. The quarterly dividend has risen every year in the record, from $0.40 in 2013 to $1.73 in 2026.
Bull case: Second-quarter revenue grew 10.2% to $16.99 billion, led by Skyrizi at $5.51 billion (up 24.4%) and Rinvoq at $2.53 billion (up 24.5%). Skyrizi’s composition-of-matter patent runs to 2033, which gives the dividend a long horizon. Management says AbbVie is “carrying significant momentum into the second half of 2026.”
Risk: Humira keeps declining, with sales down 35.9% to $756 million, and the $10.9 billion Apogee acquisition adds execution risk.
Realty Income: Monthly Checks That Keep Climbing
Realty Income (NYSE:O) pays monthly, which matches how retirees pay their bills. The annualized forward dividend of $3.258 against a price of $54.38 gives a high yield of 5.99%.
Dividend safety: REITs are best measured on adjusted funds from operations (AFFO), the cash available for distribution. The dividend equals about 73% of the low end of raised AFFO guidance of $4.44 to $4.45 per share. Occupancy stands at 98.8%, and re-leased properties achieved 102.7% of prior rent. Net debt to pro forma adjusted EBITDAre is 5.4 times, Fitch assigned an “A” rating, and liquidity rose to more than $5.7 billion. Through the second quarter, the company reported its 115th consecutive quarterly dividend increase, and the latest monthly payout rose to $0.2715 from $0.271.
Bull case: AFFO per share grew 3.8% to $1.09, and Realty Income committed $2.6 billion at a 7.3% initial cash yield. A new $6 billion hyperscale data center joint venture adds long-lease, investment-grade tenants. The stock is down 9.08% over the past month, which has driven the forward yield higher.
Risk: Non-investment-grade tenants account for 65.7% of annualized base rent, which leaves the portfolio exposed to retail bankruptcies in a downturn.
Enbridge: Pipeline Tolls That Fund a High-Yield Dividend
Enbridge (NYSE:ENB) declared a quarterly dividend of C$0.9700 per share. Converted to U.S. dollars, the annualized forward amount is $2.784, a high-yield 5.95% at the current price of $46.80.
Dividend safety: Midstream payouts are measured against distributable cash flow (DCF). The annualized C$3.88 dividend equals about 68% of the low end of 2026 DCF guidance of C$5.70 to C$6.10 per share, guidance management confirmed. Second-quarter DCF came in at $2.95 billion. Debt to EBITDA is high at 5.1x, partly because of currency translation. Enbridge’s quarterly payment record runs back to 1999.
Bull case: Enbridge holds a secured growth backlog of about C$41 billion. It targets roughly 5% annual growth in adjusted EBITDA, DCF per share, and EPS. The chief executive calls the current setup the “best macro environment for growth in 10 years.” Fee-based pipeline revenue supports that outlook.
Risk: U.S. holders take currency risk, since the dividend is set in Canadian dollars. The USD-equivalent payment slipped from 0.712 to 0.696 this year even though the Canadian-dollar amount held steady.
Building a Paycheck Beyond Social Security
Together, these five stocks cover a lot of ground for a retiree, as Verizon and Altria supply ultra-high current yield backed by cash-rich businesses. Realty Income and Enbridge add monthly and fee-based income, and AbbVie offers the strongest coverage and fastest dividend growth, while each has a long payment record and cash flow that covers its dividend. This is the whole exercise in our free Paycheck Portfolio guide. Turning a lump sum into something that acts like a paycheck means working out the mix, the payment calendar, and the withdrawal order. Next, watch the official COLA announcement, upcoming dividend declarations, and whether each company holds its full-year guidance.
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Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad, diverse career, including a stint as creative services director at an NBC affiliate in Austin, Texas, gives him unique insight into the financial industry.
Lee Jackson's journey in the financial industry spans more than 30 years, including nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career spanned pivotal sell-side Wall Street events, from the dot-com rise and bubble to the Long-Term Capital Management debacle, 9/11, and the Great Recession of 2008. This reflects his resilience and adaptability amid market volatility.
Lee Jackson’s practical financial industry experience, gained through a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing across various platforms. This unique combination allows him to shed light on the intricacies of Wall Street in a way only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.
Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.
