While Social Security does provide one of the best-known sources of inflation-adjusted retirement income out there, the reality is the program's typical monthly payment for a retiree is fairly modest. As a result, many retirees need a supply of cash beyond Social Security in order to cover their costs. Dividend-paying stocks can provide a supplemental source of income, but companies can cut their dividends when times get tough.

To try to thread that needle, three Motley Fool contributors picked out companies that both pay current dividends and look capable of continuing that trend long term. They selected Starbucks (SBUX -1.40%), Target (TGT -0.88%), and Realty Income (O -0.85%). Read on to find out why and decide for yourself whether any of them may deserve a spot in your retirement portfolio as a source of income to supplement your Social Security.

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Inject your portfolio with a blast of caffeine

Eric Volkman (Starbucks): High-end coffee aficionados might disagree, but Starbucks is a fine place to score a cup of coffee. Those looking for additional income in their later years can also avail themselves of a tasty off-menu item from the coffee specialist when they buy shares: a steady and reliable dividend.

Starbucks has never been particularly renowned as a dividend stock, but maybe it should be. The cafe chain operator initiated its shareholder payout in 2010 and has paid it every quarter since. The company has also raised it every year. Adjusted for stock splits, Starbucks' dividend has risen more than tenfold over its lifetime, from $0.05 per share to the most recently announced $0.53, good for a 2.4% yield as of this writing.

This is well supported by a sprawling global business built on a foundation of strong and consistent demand. Coffee is a beverage of habit for many, which is why even the most remotely located Starbucks stores are often packed with java-craving customers at peak hours.

The company's strategy is to keep building out its network -- particularly in the U.S., as ever, and China -- because this has powered growth for years. It's also pushing to reduce costs through automation. If successfully implemented, this would speed up the somewhat cumbersome drink production process and consequently increase sales volume at the cafes.

Starbucks is a relentless expander. This tried-and-true strategy, combined with barista-assisting technology, promises to keep the growth train running. This would be a happy development for the dividend, which is likely to continue its rise over the years.

This brick-and-mortar retailer has tripled its dividend in the past decade

Parkev Tatevosian (Target): Target stock could be an excellent option if you're looking to supplement your Social Security income. The company has consistently paid investors a dividend for decades. The retailer has made investments in its business that are proving quite effective. Fulfillment options like buy online and pick up in-store, curbside pick-up, and same-day delivery are extremely popular with customers. 

Even as these additional fulfillment options continue to scale, Target increased revenue from $73 billion in fiscal 2012 to $106 billion in fiscal 2021. That was good enough for a compound annual growth rate of 4.2%, a healthy result for a brick-and-mortar business of this size. Who said retail was dead? More importantly, Target grew earnings per share at a rate of 13.5% over the same period.

Why is that more important? Because dividends are paid out of earnings. The robust bottom-line growth means Target can support its dividend payment, which has tripled since fiscal 2012, without any concern it will run out of cash or exhaust its borrowing capacity. As its capital investments both in-store and online bear fruit, Social Security recipients can expect Target to continue to grow its dividend over the next decade.

A company known for monthly dividend payments -- and regular increases

Chuck Saletta (Realty Income): Realty Income is so committed to its dividend the company actually calls itself "The Monthly Dividend Company®." Not only does it pay a monthly dividend, but it has routinely increased that payment -- 117 times since the company listed on the New York Stock Exchange in 1994. That is an absurdly strong commitment to its dividend.

Of course, those dividend increases are generally tiny. For instance, the October dividend of $0.2480 per share was just slightly higher than the $0.2475 it paid in September. Still, the combination of a monthly payment and a fairly regular commitment to increases makes Realty Income an interesting stock to consider as a supplement to your Social Security income.

When considered with respect to the company's stock price of $57.35 per share as of this writing, that works out to a nearly 5.2% yield, well above the broad market average. Of course, for a dividend to be sustainable, it must be covered by a company's operations. On that front, Realty Income's total annual payout of around $1.5 billion appears reasonably covered by its annual cash from operations of nearly $2 billion. 

As a real estate investment trust (REIT), Realty Income has to pay out at least 90% of its earnings as a dividend. As long as the company remains both profitable and structured in this way, it will likely pay a relatively high dividend. The key risk is that since it's in the business of being a landlord, an extended rough period in the economy could lead to higher vacancies and/or lower rent collections.

Still, Realty Income has a decent balance sheet with a debt-to-equity ratio around 0.6 and a current ratio above 1.0. That combination gives it a reasonable chance of riding out a modest and temporary downturn while keeping that dividend intact.

While not a guarantee of success, that total picture does help provide a strong reason to believe Realty Income could help you supplement your Social Security income.

Get started now

A decently sized, reasonably covered, and growing dividend can do wonders to boost your retirement income. Remember, though, that it's not just how much the company distributes to its shareholders but how sustainable those dividends are over time. Get started now with dividend-paying stocks, and you can maximize the additional income available to you to help cover your costs in retirement.