How to Build a Second Social Security Check in Dividend Income, Starting From Zero

David Beren

Sat, October 31, 2026 at 3:05 PM EDT 5 min read

Quick Read

Replicating the average $2,071 monthly Social Security check requires roughly $991,000 invested across FDLO and VYMI , blending to a 2.5% yield.
At a 6% annual return, reaching $991,000 takes about $2,144 per month over 20 years, dropping to $1,682 at an 8% return.
Place FDLO in a Roth IRA for tax-free growth and VYMI in a taxable account to capture its foreign tax credit.
Read More: Avoid these 13 retirement mistakes before they derail your future (sponsor)

Imagine a second deposit landing every month, the same size as the Social Security check you already count on. The average retired worker collects $2,170 a month in 2026, according to the Social Security Administration's COLA fact sheet. That comes to $26,040 a year, and that's the target.

social security printed in text on page as visual aid or business law reference — J. Frederick / Shutterstock.com

This plan uses one portfolio split equally between two funds: Fidelity Low Volatility Factor ETF( NYSEARCA:FDLO ) and Vanguard International High Dividend Yield ETF( NASDAQ:VYMI ). The yields below are trailing figures, meaning each fund's payouts over the past year relative to the current share price. I pulled them at the end of October 2026.

How Big the Nest Egg Has to Be

Blend the two yields and the portfolio earns about 2.5%. To pay out $26,040 a year at that rate, you'd need roughly $1,042,000 invested.

That's a big number when you're starting from zero, so here's what it takes each month to get there. These figures assume every dividend gets reinvested, returns compound monthly, and there are no fees or taxes along the way:

At a 6% average annual return, you'd invest about $3,582 a month for 15 years, $2,254 for 20 years, or $1,503 for 25 years.
At an 8% average return, those numbers drop to about $3,010, $1,768, and $1,095.

Real markets don't deliver smooth returns, and the target keeps moving. The 2027 COLA is 3.6%, so the check you're trying to match gets bigger every year.

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Fidelity Low Volatility Factor ETF

FDLO buys large and midsize U.S. companies whose stocks have historically moved less than the market's and whose earnings have been steadier. Apple makes up about 8% of the fund and Microsoft about 6%. Steady dividend payers like Johnson & Johnson, Verizon, and Duke Energy fill out the rest.

This fund holds half the portfolio. Its yield runs about 1.3%, which covers roughly $7,100 of the annual target.

Here's the one thing to know: FDLO is a low-yield fund by design, and its job here is a smoother ride and long-term growth. Its adjusted share price rose 251% over the past decade.

Its quarterly payout has also grown, from 10.7 cents a share in early 2017 to 27.9 cents this past March. Before you buy, look up the current expense ratio on Fidelity's fund page.

Vanguard International High Dividend Yield ETF

VYMI tracks companies in developed and emerging markets outside the U.S. that are expected to pay above-average dividends. Real estate investment trusts are left out. It charges 0.07% a year, or about $7 on every $10,000 invested.

VYMI holds the other half. At a yield of about 3.7%, it brings in roughly $19,000 a year, which is most of the check.

Foreign governments often take a cut of dividends before you see them, but in a taxable account, the IRS says you may be able to claim a foreign tax credit. If your foreign taxes are reported on Form 1099-DIV and total no more than $300 ($600 married filing jointly), you can skip Form 1116.

Inside an IRA, those dividends never show up on your tax return, so there's nothing to claim the credit against. Currency moves also change what the payouts are worth in dollars. The latest quarterly payment was $0.82 a share, down from $1.26 the quarter before.

Roth IRA or Taxable Account: Picking a Home

With a Roth IRA, withdrawals are tax-free later. To qualify, you must be at least 59½. You also need to be past the five-year window that starts with your first Roth contribution (26 U.S.C. § 408A(d)(2)). For 2026, you can put in up to $7,500, or $8,600 if you're 50 or older.

A taxable account lets you keep VYMI's foreign tax credit, but you'll owe tax on dividends every year. Some investors split it up. FDLO goes in the Roth, where its growth compounds tax-free, and VYMI sits in a taxable account where the credit still works. Most monthly figures above run past a single Roth limit anyway, so plenty of savers will end up using both.

Your Number and the Habit That Gets You There

The goal is about $1,042,000. At a 6% return over 20 years, that takes roughly $2,254 a month. With more time or stronger returns, it takes less.

The habit that matters most is automating the deposit and reinvesting every dividend until the day you need that second check. Every number in this plan assumes those dividends keep buying more shares.

You want the full playbook. For turning a lump sum into a monthly income stream once you get there, our free Paycheck Portfolio guide lays out the mix, the payment calendar, and the withdrawal order.