$1.4 Million Portfolio Tops Average CalPERS Pension at 3.5% Yield
Updated
Updated · 24/7 Wall St. · Jun 3
$1.4 Million Portfolio Tops Average CalPERS Pension at 3.5% Yield
3 articles · Updated · 24/7 Wall St. · Jun 3
Summary
A $1.4 million portfolio yielding 3.5% generates about $49,000 a year, edging above CalPERS' reported average annual retirement benefit of $45,264.
The math implies roughly $1.29 million is needed to match that average pension at a 3.5% yield, while the same portfolio would produce $56,000 at 4%, $84,000 at 6% and $140,000 at 10%.
With the 10-year Treasury around 4.45%, lower-yield dividend portfolios trade some current income for dividend growth, tax advantages and potential capital appreciation; higher-yield strategies raise cash flow but can cap upside or erode principal.
CalPERS pensions carry a 2% annual COLA cap, and the report argues dividend-growth portfolios compounding payouts at 6% to 8% can better preserve purchasing power over time than flat high-yield income streams.