Improve Your Retirement Income with These 3 Top-Ranked Dividend Stocks

Here's an eye-opening statistic: older Americans are more afraid of running out of money than of death itself.And older Americans have legitimate reasons for this worry, even if they have dutifully saved for their golden years. That\s because the traditional ways people manage retirement may no longer provide enough income to meet expenses- and with people generally living longer, the principal retirement savings is exhausted far too early in the retirement period.Retirement investing approaches of the past don't work today.For many years, bonds or other fixed-income assets could produce the yield needed to provide solid income for retirement needs. However, these yields have dwindled over time: 10-year Treasury bond rates in the late 1990s were around 6.50%, but today, that rate is a thing of the past, with a slim likelihood of rates making a comeback in the foreseeable future.The effect of this drop in rates is substantial: over 20 years, the change in yield for a $1 million investment in 10-year Treasuries is over $1 million.And lower bond yields aren't the only potential problem seniors are facing. Today's retirees aren't feeling as secure as they once did about Social Security, either. Benefit checks will still be coming for the foreseeable future, but based on current estimates, Social Security funds will run out of money in 2035.Unfortunately, it looks like the two traditional sources of retirement income-bonds and Social Security-may not be able to adequately meet the needs of present and future retirees. But what if there was another option that could provide a steady, reliable source of income in retirement?Invest in Dividend StocksDividend-paying stocks from low-risk, high-quality companies are a smart way to generate steady and reliable attractive income streams to replace low risk, low yielding Treasury and bond options.Look for stocks that have paid steady, increasing dividends for years (or decades), and have not cut their dividends even during recessions.Going beyond those familiar names, you can find excellent dividend-paying stocks by following a few guidelines. Look for companies that pay a dividend yield of around 3%, with positive annual dividend growth. The growth rate is key to help combat the effects of inflation.Here are three dividend-paying stocks retirees should consider for their nest egg portfolio.Franklin Resources (BEN) is currently shelling out a dividend of $0.33 per share, with a dividend yield of 5.29%. This compares to the Financial - Investment Management industry's yield of 1.62% and the S&P 500's yield of 1.39%. The company's annualized dividend growth in the past year was 3.23%. Check Franklin Resources dividend history here>>>Fulton Financial (FULT) is paying out a dividend of $0.19 per share at the moment, with a dividend yield of 3.57% compared to the Banks - Northeast industry's yield of 2.13% and the S&P 500's yield. The annualized dividend growth of the company was 5.88% over the past year. Check Fulton Financial dividend history here>>>Currently paying a dividend of $0.64 per share, TIM S.A. Sponsored ADR (TIMB) has a dividend yield of 4.69%. This is compared to the Wireless Non-US industry's yield of 1.63% and the S&P 500's current yield. Annualized dividend growth for the company in the past year was 126.36%. Check TIM S.A. Sponsored ADR dividend history here>>>But aren't stocks generally more risky than bonds?Overall, that is true. But stocks are a broad class, and you can reduce the risks significantly by selecting high-quality dividend stocks that can generate regular, predictable income and can also decrease the volatility of your portfolio compared to the overall stock market.A silver lining to owning dividend stocks for your retirement portfolio is that many companies, especially blue chip stocks, increase their dividends over time, helping offset the effects of inflation on your potential retirement income.Thinking about dividend-focused mutual funds or ETFs? Watch out for fees.You may be thinking, "I like this dividend strategy, but instead of investing in individual stocks, I'm going to find a dividend-focused mutual fund or ETF." This approach can make sense, but be aware that some mutual funds and specialized ETFs carry high fees, which may reduce your dividend gains or income, and defeat the goal of this dividend investment approach. If you do wish to invest in a fund, do your research to find the best-quality dividend funds with the lowest fees.Bottom LinePursuing a dividend investing strategy can help protect your retirement portfolio. Whether you choose to invest in stocks or through low-fee mutual funds or ETFs, this approach can potentially help you achieve a more secure and enjoyable retirement.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportFranklin Resources, Inc. (BEN) : Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment Research