A 61-Year-Old Turned Down a $725,000 Annuity and Bought Dividends Instead. Here’s What Happened to Her $3,700 Monthly Paycheck

She’s 61, sitting across a desk from an annuity sales rep with a quote in her hand. Give the insurance company $725,000, the quote says, and a check shows up every month for the rest of her life. She folds the paper, thanks the sales rep, and walks out.

She’s a composite retiree, built to show the math. Her plan is a six-holding dividend portfolio meant to pay about $3,700 a month, a decision she made at 61, years before most retirees start shopping for guaranteed income.

What the Annuity Offered

A single premium immediate annuity works like a pension you buy. She’d pay an insurance company one lump sum, and it would pay her every month for life, starting right away. For a 61-year-old woman, $725,000 typically gets a check in the mid-$3,000s a month. That’s a typical range, and actual quotes vary by insurance company, age, and health.

Most immediate annuities pay a fixed amount that never goes up unless the buyer adds a cost-of-living rider. If the insurance company fails, state guaranty associations back annuities only up to set limits, and most state laws cap covered benefits at $250,000. The same backstop applies when a pension is transferred to an insurance company.

How Her Portfolio Pays

We used prices from the first week of November 2026 and each holding’s last 12 months of payouts. Based on that, her portfolio yields about 6.2%, generating roughly $44,590 annually, or $3,716 a month on average. Actual monthly payments vary because several holdings distribute quarterly, and none of the payouts are guaranteed. That puts her just above the $3,700 monthly target before taxes.

JPMorgan Equity Premium Income ETF

JPMorgan Equity Premium Income ETF (NYSEARCA:JEPI) holds a defensive mix of large U.S. stocks and sells call options against them. Selling those options gives up some upside in exchange for cash today.

It’s her biggest position at 25%, yields about 8.1% and supplies roughly $1,222 a month. Expect the check to move around: monthly payouts in 2026 ran from roughly 34 cents to 45 cents a share.

Schwab International Dividend Equity ETF

Schwab International Dividend Equity ETF (NYSEARCA:SCHY) holds dividend payers outside the U.S., including Unilever, Roche and BHP. At 15%, it yields about 3.6% and adds roughly $323 a month. It pays quarterly, and the amounts swing: $0.18 a share in March 2026 versus $0.36 in June.

W. P. Carey

W. P. Carey (NYSE:WPC) is a net-lease REIT, so its tenants cover the rent plus taxes, insurance, and maintenance. Its 15% stake yields about 5.7%, or roughly $521 a month. After it spun off its office buildings in November 2023, the quarterly dividend dropped from $1.071 to $0.86. It has gone up every quarter since and now pays $0.95.

Main Street Capital

Main Street Capital (NYSE:MAIN | MAIN Price Prediction) is a business development company. It lends to and invests in small private businesses, then passes most of the profit through to shareholders. At 15%, it yields about 7.6% counting extras, or roughly $691 a month.

It pays $0.265 every month, plus a $0.30 supplemental that has now come 21 quarters in a row. Keep an eye on non-accrual investments, which accounted for 3.5% of the portfolio at cost and 0.9% at fair value as of September 30.

Bank of Nova Scotia

Bank of Nova Scotia (NYSE:BNS), known as Scotiabank, makes up 15%. It yields about 3.5% and adds roughly $316 a month.

Its quarterly dividend sat near $0.80 in both January 2024 and October 2026. Meanwhile, the shares rose about 45% over the past year, which pulled the yield down. Canada deducts 15% of the dividend in taxable accounts. A U.S. foreign tax credit can offset most of that.

Global X U.S. Preferred ETF

Global X U.S. Preferred ETF (NYSEARCA:PFFD) holds preferred shares, which sit between bonds and common stock. They pay a set dividend that comes before common shareholders get paid. Her 15% stake yields about 7.1%, or roughly $643 a month. Interest rates move this one: the price is down about 11% over five years, and the monthly distribution dropped from $0.105 to $0.10.

Which Risks She Kept and Which She Dodged

The portfolio’s estimated $3,716 monthly average is higher than the annuity’s illustrated payment, but the two work differently. The annuity provides guaranteed lifetime income backed by the insurer, including a return of the money used to purchase the contract. With the portfolio, she retains ownership of the investments, can leave their remaining value to heirs, and may benefit from future dividend increases.

Her trade-off is that nobody guarantees any of it. W. P. Carey has already shown that dividends can get cut, and the preferred fund has shown that prices can fall. In return, she avoids a fixed check that inflation eats away at and exposure to an insurance company well above guaranty limits.

A middle path exists too: annuitize part of the money to cover basic bills and invest the rest for dividends. The appeal of her approach is that the shares themselves stay put while the checks keep coming, which is the whole premise of a dividend ladder (we walked through how to build one in a free report here).

Readers who want to stress-test their own version of this plan can plug a different balance or payout rate into the math below and see how long it holds up.

Questions to Ask Before Signing Anything

Before choosing, anyone in her seat should ask one question: what happens if I live to 95? The annuity’s mid-$3,000s keeps coming no matter how long she lives. The portfolio’s $3,716 lasts only as long as these six payers hold up, and if a market crash at 80 forces her to sell shares to pay the bills, the dividend plan stops working.

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