Case Study: A $150,000-a-Year Retirement Income Plan by 62

By Dan Gould | Three Streams Financial — Independent, Fee-Only Fiduciary Advisor

Client profile: Mark and Julie, mid-40s, with a small inheritance. Names and identifying details have been changed for privacy — see compliance note at the end.

Every year, we meet couples in their mid-40s who feel behind on their retirement savings. They’re doing fine — good jobs, a house, kids — but their savings don’t match their goals yet. This case study shows how we helped one couple build a plan to close that gap.

Note: Names and details below are illustrative and generalized to protect privacy. Figures are planning assumptions, not guarantees. See disclosures at the end.

The Goal: Replace a $150,000 Paycheck With Three Income Streams

Mark and Julie (names changed) came to us at 45. Combined income: $150,000. Existing retirement savings — a 401(k) and rollover IRA — totaling about $310,000, which is behind the usual “6x salary by 50” rule of thumb. Mortgage: 12 years left. Two kids, one starting high school.

They felt behind, but they weren’t out of time — they had 17 years until their goal: retire at 62 with $150,000 a year in income, enough to fully replace their current lifestyle. That’s a specific, buildable goal, not just “save more.” This is exactly the kind of goal we build toward through our retirement income planning process.

To get there, we split $150,000/year into three simpler pieces:

1. Social Security — claimed strategically by both spouses
2. A dividend growth portfolio — a new, separate $300,000 available to invest from an inheritance (in addition to, not part of, their existing $310,000 401(k)/IRA), built specifically to pay them a growing income stream
3. Their existing $310,000 in 401(k)/IRA savings — a flexible backup, drawn on to close whatever gap remains after the first two streams

No single piece has to carry the whole goal. If one falls short in a given year, the others are still there. And because the dividend portfolio was funded with fresh money rather than by repurposing their existing retirement accounts, both pieces can keep working and growing independently for the full 17 years.

Curious how we landed on $150,000 as the target in the first place? See our related post, How Much Do I Need to Retire in Kansas? Why the Real Answer Is an Income Plan, Not Just a Number.

The Numbers: $300,000 Grows Into $1.71 Million by Age 62

The $300,000 dedicated to the dividend growth portfolio was new money — separate from, and in addition to, Mark and Julie’s existing $310,000 401(k)/IRA balance. Together with $2,000/month ($1,000 each) in ongoing contributions over 17 years, we modeled this portfolio starting at a 3.6% dividend yield, with both the dividends and the portfolio’s value growing at 7% a year.

In plain terms: the portfolio starts by paying about $10,800/year in dividends. Because the whole account keeps growing at 7%, that income grows right along with it — no lucky stock picks required, just time and consistent investing.

By 62, the $2,000/month habit — about 16% of their income — turns into a portfolio worth $1.71 million, throwing off $61,600/year in income. That’s nearly six times what it started at.

Want to understand why compounding works this way? Read Dividend Growth Investing in 2025: Build Lasting Wealth With Compounding Income.

These are planning assumptions, not guarantees — actual returns and dividend growth will vary. This table covers only the dedicated $300,000 dividend growth portfolio; it does not include Mark and Julie’s separate, existing $310,000 401(k)/IRA balance, which is addressed as its own income stream below.

LEARN MORE AT OUR FREE DIVIDEND GROWTH WORKSHOP COMING UP SOON – CLICK HERE!

The Payoff: $150,000/Year From Three Sources, Not One

Our goal with every client is to leverage multiple streams of income, reduce reliance on any single source, and generate lifetime retirement income that outpaces inflation—ensuring you never run out of money.

Here’s how the three streams combine to hit the hard target of $150,000/year at age 62:

A note on that third row, in the interest of full transparency: Social Security ($54,000) and the dedicated dividend portfolio ($61,600) are each independently modeled — see the sections above. The existing savings figure of $34,400 is a balancing draw, sized to close the remaining gap so all three streams sum exactly to the $150,000 target — it is not a separate, independently projected withdrawal rate applied to the $310,000 balance.

For more on how a rising dividend stream can extend how long your other retirement savings last, see How Growing Dividends Can Raise Your Safe Withdrawal Rate in Retirement.

Three takeaways if you feel behind:

1. A late start is a math problem, not a failure. 17 years is plenty of time — it just takes a clear plan.
2. Break the big number into pieces. “$150,000/year” is scary. “$1,000/month each” into a dedicated new investment is doable.
3. Diversify your income, not just your investments. Three streams — Social Security, a dedicated dividend portfolio, and existing savings — are more resilient than betting everything on one.

If your situation looks like Mark and Julie’s starting point, we’d be glad to run these numbers for you. Want to see what a plan like this could look like with your own numbers? Join our Dividend Growth Investing Workshop, or read why we work on a fee-only basis before you reach out. Curious how this same three-stream approach holds up if the market underperforms for 15 years? See our second case study: A $170,900-a-Year Retirement Plan — What Happens If the Market Underperforms for 15 Years.

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Learn more about dividend growth investing:

• https://threestreamsfinancial.com/conservative-investor-growth-lower-volatility-equities/
• https://threestreamsfinancial.com/how-growing-dividends-can-raise-your-safe-withdrawal-rate-in-retirement/

Fee-Only Advice. Proven Process. Transparent Planning.

Remember, there’s no one-size-fits-all approach to investing. Conduct thorough research, consider your personal circumstances, and consult a fee-only financial advisor before making any investment decisions. Past performance, including the 2008 Dividend Aristocrats data referenced above, is not indicative of future results.

P.S. Want to see how your own portfolio is positioned for today’s valuation environment? I’ve created a free Personalized Retirement Map that addresses all four critical areas: Income, Investments, Planning, and Legacy. No pitch, just clarity. → Get Your Free Personalized Retirement Map

Disclosures: This is a hypothetical, illustrative example for educational purposes — not an actual client, and not a guarantee of results. The $300,000 dividend growth portfolio is presented as new/additional money, separate from the $310,000 existing 401(k)/IRA balance; both are illustrative figures. Dividend portfolio figures assume a 3.6% starting dividend yield and a matched 7% annual growth rate for both dividends and portfolio value; actual returns will fluctuate, and dividend growth investing carries risk, including possible dividend cuts and loss of principal. The existing savings income figure is a balancing draw set to reach the stated $150,000 target, not an independent projection. Social Security estimates will vary based on individual circumstances. This is not personalized investment, tax, or Social Security advice. Three Streams Financial LLC is a fee-only registered investment adviser — see our Form ADV for details.

Feel like you’re starting from behind? This case study shows what’s possible—see the broader strategy in: Still Feel Behind in Retirement Savings? Why 2025 Is the Year to Take Action.