If You Have $480,000 Saved at 67 and Just Sold a Restaurant for $1.1 Million Cash, Here Is the Income Plan That Actually Holds

After 22 years, a couple sold their restaurant and suddenly found themselves staring at a very different balance sheet. The sale dropped $1.1 million in cash onto the table, adding to the $480,000 already sitting in a SEP-IRA. On paper, that looks like roughly $1.58 million in investable assets before taxes enter the chat like an uninvited auditor with a flamethrower.

And taxes matter first. Depending on the restaurant’s cost basis and how the sale is structured, federal and state capital gains taxes could easily consume $200,000 to $250,000. That leaves closer to $1.3 million in cash plus the SEP-IRA, or about $1.78 million total working for retirement.

At 67, Social Security becomes the income floor. For a dual-earner couple in this range, combined benefits could land around $57,600 annually. From there, the portfolio’s job gets simpler: cover the gap between that baseline income and the retirement lifestyle they actually want.

What yield buys at $1.58 million

Three tiers, three tradeoffs. Use $1.58 million as the base; the framework scales if your post-tax number lands at $1.78 million.

1. Conservative tier (3% to 4% yield). $1,580,000 divided by 0.035 equals about $55,300 a year. Divided by 0.04, about $63,200 a year. This is the dividend-growth bucket: Johnson & Johnson (NYSE:JNJ | JNJ Price Prediction) at a 2.4% yield with a $1.34 quarterly payout, Procter & Gamble (NYSE:PG) yielding 2.9% after its 70th consecutive annual hike, Coca-Cola (NYSE:KO) at a 2.6% yield, and broad dividend-growth index funds. Combined with Social Security, this tier supports roughly $113,000 to $121,000 of gross income with the lowest disruption risk.
2. Moderate tier (5% to 7% yield). $1,580,000 at 6% equals about $94,800 a year; at 7%, about $110,600. Net-lease REITs, preferred shares, covered-call equity income funds, and high-dividend telecom live here. Realty Income (NYSE:O) pays a $0.2705 monthly dividend for a 5.2% yield, riding a streak of 670 consecutive monthly payments. Verizon (NYSE:VZ) yields 5.9% after raising its quarterly dividend to $0.7075. Dividend growth slows here, and covered-call structures cap upside.
3. Aggressive tier (8% to 14% yield). $1,580,000 at 10% equals about $158,000 a year; at 12%, about $189,600. Business development companies, mortgage REITs, leveraged covered-call funds, high-yield bond funds. Headline income is huge. Principal erosion is the standard outcome; distributions are cut in stress periods. At 67 with a 25-year horizon, this tier funds today by spending the asset.

The number that quietly wins

The 10-year Treasury at 4.4% is the honest benchmark. Fed funds sit at 3.75%. Core PCE is in the 90.9th percentile of its trailing range, which is the case for owning growth alongside yield.

A 3.5% dividend stream that grows 6% to 8% a year doubles inside a decade. The $55,300 a year a conservative tier throws off becomes roughly $110,000 by age 77 without touching principal. A 12% distribution that holds flat (and often does not) is stuck at $189,600 while inflation chews through it. That is why JNJ’s 26 years of uninterrupted quarterly raises matter more than a headline yield. Streaks break.

Three moves this week

1. Confirm the tax bill before you invest a dollar. Have your CPA price the sale with documented basis and check whether any portion qualifies for §1202 treatment, plus whether the building is structured for a 1031 exchange. A $50,000 swing in tax is a $2,000 a year swing in income at a 4% draw.
2. Build to the income target. A 4% withdrawal on $1.78 million is $71,200; add $57,600 in Social Security and the gross is $128,800. Federal tax for an MFJ 65+ household lands near $9,800, leaving roughly $119,000 net. If your real spending is below that, drop the draw and let the conservative tier compound.
3. Stress-test the moderate tier against the conservative one. Pull the 10-year total return on a dividend-growth ETF versus a high-yield covered-call fund. JNJ is up about 160% over 10 years; KO is up about 142%. High-yield products usually trail on total return even when current income looks better.

The sale changed the math. Pre-sale, $480,000 at a 4% draw funded $19,200 a year, which fails the lifestyle test. Post-sale, the conservative tier alone clears six figures with Social Security. The plan that actually holds is the one that pays the bills today and still throws off bigger checks at 85.