3 Top-Ranked Dividend Stocks: A Smarter Way to Boost Your Retirement Income

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.In today's economic environment, traditional income investments are not working.In the past, investors going into retirement could invest in bonds and count on attractive yields to produce steady, reliable income streams to fund a predictable retirement. 10-year Treasury bond rates in the late 1990s hovered around 6.50%, whereas the current rate is much lower.While this yield reduction may not seem drastic, it adds up: for a $1 million investment in 10-year Treasuries, the rate drop means a difference in yield of more than $1 million.In addition to the considerable drop in bond yields, today's retirees are nervous about their future Social Security benefits. Because of certain demographic factors, it's been estimated that the funds that pay the Social Security benefits will run out of money in 2035.So what's a retiree to do? You could cut your expenses to the bone, and take the risk that your Social Security checks don't shrink. Or you could find an alternative investment that provides a steady, higher-rate income stream to replace dwindling bond yields.Invest in Dividend StocksAs a replacement for low yielding Treasury bonds (and other bond options), we believe dividend-paying stocks from high quality companies offer low risk and stable, predictable income investors in retirement seek.Look for stocks that have paid steady, increasing dividends for years (or decades), and have not cut their dividends even during recessions.A rule of thumb for finding solid income-producing stocks is to seek those that average 3% dividend yield, and positive yearly dividend growth. These stocks can help combat inflation by boosting dividends over time.Here are three dividend-paying stocks retirees should consider for their nest egg portfolio.Cullen/Frost Bankers (CFR) is currently shelling out a dividend of $1.00 per share, with a dividend yield of 3.34%. This compares to the Banks - Southwest industry's yield of 0.83% and the S&P 500's yield of 1.55%. The company's annualized dividend growth in the past year was 8.7%. Check Cullen/Frost Bankers dividend history here>>>First Financial Bancorp (FFBC) is paying out a dividend of $0.25 per share at the moment, with a dividend yield of 4.30% compared to the Banks - Midwest industry's yield of 2.71% and the S&P 500's yield. The annualized dividend growth of the company was 4.35% over the past year. Check First Financial Bancorp dividend history here>>>Currently paying a dividend of $0.29 per share, German American Bancorp (GABC) has a dividend yield of 3.04%. This is compared to the Banks - Midwest industry's yield of 2.71% and the S&P 500's current yield. Annualized dividend growth for the company in the past year was 7.41%. Check German American Bancorp 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.If you prefer investing in funds or ETFs compared to individual stocks, you can still pursue a dividend income strategy. However, it's important to know the fees charged by each fund or ETF, which can ultimately reduce your dividend income, working against your strategy. Do your homework and make sure you know the fees charged by any fund before you invest.Bottom LineWhether you select high-quality, low-fee funds or stocks, seeking the steady income of dividend-paying equities can potentially offer you a path to a better and more stress-free 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 reportCullen/Frost Bankers, Inc. (CFR) : Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment Research