As of 2025, the Average Social Security Retirement Benefit Check Is $1,976. Could Realty Income (O) Help Boost Your Retirement?

Key Points

• Although they're supposed to, Social Security's payment increases certainly don't feel like they've kept up with retirees' rising costs of living.

• Most older Americans will want to make a point of maximizing the amount of income their own retirement savings is producing.

• Real estate investment trust Realty Income may be a great option for most to help make that happen.

• 10 stocks we like better than Realty Income ›

Most retirees are happy to receive a monthly check from Social Security. The fact is, however, these payments just aren't all that big. The average benefit right now stands at a modest $1,976 per month, or $23,712 per year.

That's only part of most peoples' retirement income, of course. As The Motley Fool's own in-house research arm points out, pensions and other retirement savings push the United States' median annual retirement income figure up to $54,710, while the average annual income for the country's 65-and-up crowd is $83,950 (skewed higher by a small handful of enormous earners).

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Still, that's far from funding a posh lifestyle for most. That's why current and future retirees might want to think about ways of reliably boosting this income just to ensure they're able to cover all of their costs of living. Most seniors are dialing back their spending, in fact, including making cuts to their own medical care.

If this sounds like you, you might want to take a closer look at income-generating investment Realty Income (NYSE: O). This simple holding just might be what more and more older Americans need right now.

Image source: Getty Images.

What's Realty Income?

Even if you've never heard of it you've almost certainly been exposed to its business.

See, Realty Income is a real estate investment trust, or REIT for short. That just means it owns revenue-generating real estate, and passes the majority of its profits along to shareholders in the form of dividends.

There are several kinds of real estate investment trusts, which is to say, REITs tend to specialize in one kind of property, like hotels, office buildings, or apartment complexes. Realty Income's specialty is brick-and-mortar retail, serving as landlord to some of America's most familiar consumer-facing companies including 7-Eleven, Dollar General, FedEx, Home Depot, Walmart, and many others. No single industry accounts for more than one-tenth of its rent-bearing base, however, while no single company accounts for more than 4% of its revenue.

But, still, brick-and-mortar retail? Isn't the industry supposed to be dying?

Actually, rumors of its demise have been greatly exaggerated.

The industry is admittedly being forced to contend with its overly aggressive growth in the 1990s that would soon thereafter be interrupted by the advent of e-commerce. You may have even already heard Coresight Research's estimate that roughly 7,325 U.S. storefronts were shuttered in 2024 alone. What you might not have heard is that 5,970 new stores were opened to take their place. As such, the retail apocalypse you keep hearing so much about might be better described as refinement resulting from a culling of its weakest players rather than an outright meltdown.

And for its part, Realty Income tends to work with the industry's stronger names like the aforementioned Walmart and Home Depot that aren't on the ropes. That's what its numbers say, anyway. The company's current occupancy rate for its 15,600 different properties covering 346 million square feet of retail space currently stands at 98.6%, versus the industry's average of only 94.4%. In fact, even during pandemic-riddled 2020 Realty Income's occupancy only slipped to 97.9%.

The highs and lows of ownership

So what's it like to be a Realty Income shareholder?

First and foremost, know that newcomers would be stepping in while the REIT's forward-looking yield stands at a solid 5.5%; you'd be hard-pressed to find better with a stock of comparable risk.

And its dividend track record is even more impressive. Not only has the REIT paid a dividend like clockwork since 1994, but it has also raised its per-share payout every quarter for the past 111 quarters (that's more than nine years' worth of uninterrupted quarterly dividend payment growth).

Except Realty Income doesn't dish out its dividends on a quarterly basis. It pays them every month. That's why it would be so well suited for a retiree dependent on modest retirement income from sources like Social Security. Even a relatively small investment could provide immediate spendable -- and reliable -- income that could be used to pay your bills at the same pace you receive them.

Now, there is something to consider before stepping into Realty Income. That's this ticker's price history. While there's certainly been some (very) long-term price appreciation here, for what seems like relatively long-lived stretches there can also be none at all. The stock's currently trading where it was back in late 2018 and even as far back as early 2016, in fact. There's also a great deal of interim volatility; shares have been well below and well above their current price in the meantime.

Blame interest rates mostly. Like bonds, not only are dividend-paying REIT prices highly subject to interest rate changes, but changes to interest rates also impact REITs' capacity to borrow money to purchase or develop new properties. Investors know this, and try to price Realty Income shares accordingly. The uncertain interest rate environment right now is a big part of the reason this REIT's shares' recovery efforts since 2023's low have been more than a little erratic, in fact. Simple economic uncertainty is the other key part.

Regardless, Realty Income's business and operation have proven sustainable. Barring something completely unexpected, it should be able to continue funding its ever-rising dividend indefinitely.

A great income option for most retirees

That doesn't mean Realty Income is well suited to be your only dividend-paying holding, to be clear. In fact, it arguably shouldn't be.

See, although its yield is stronger than most similar alternatives, its extreme volatility can be difficult to digest. More stable dividend growth stocks like Coca-Cola or telecom titan AT&T are solid complementary holdings to this one that could tamp down your portfolio's overall volatility, for example, making it easier to stick with this particular higher-yielding REIT.

Whatever the case, for retirees looking for immediate and reliable long-term investment income (and income growth) regardless of the economic backdrop, Realty Income offers it.

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James Brumley has positions in AT&T and Coca-Cola. The Motley Fool has positions in and recommends FedEx, Home Depot, Realty Income, and Walmart. The Motley Fool has a disclosure policy.