How much would you need to invest in ASX stocks to generate an income similar to the Age Pension?
Using Harvey Norman Holdings Ltd (ASX: HVN) as an example, we can actually put a clear number on that.
Image Source: Getty Images
How much is the Age Pension?
First, let's confirm the benchmark.
For a single person, the full Age Pension currently totals $1,200.90 per fortnight based on the latest government figures. That works out to $31,223.40 per year.
Now let's see how that compares to dividend income.
Turning an ASX dividend stock into a pension-like income
According to CommSec, Harvey Norman is expected to pay fully franked dividends of 31 cents per share in both FY26 and FY27.
At the time of writing, the Harvey Norman share price is trading at $4.54. This means that it is offering a potential dividend yield of around 6.8%, before franking credits.
To generate $31,223.40 per year from dividends alone, you would need approximately 100,720 shares.
Based on that requirement and its current share price, this implies an investment of roughly $457,269 into the ASX dividend stock.
Why I still think Harvey Norman is worth a look
Of course, income is only part of the story.
Harvey Norman has been sold off heavily in recent months, which is a big reason the dividend yield now looks so attractive. But the underlying business still has a few levers working in its favour.
One is its international expansion. The company continues to open new stores in markets like the UK, Malaysia, and parts of Europe, which provides a pathway for growth beyond Australia.
Another is its property portfolio. Harvey Norman owns a significant amount of retail real estate, which adds a layer of asset backing and long-term value that is easy to overlook.
There is also some support from the broker community. Bell Potter currently has a buy recommendation on the ASX dividend stock with a $6.70 price target. This suggests almost 50% potential upside on top of the income.
Foolish takeaway
If you are trying to replicate the income of the Age Pension using dividends, you would need around 100,720 Harvey Norman shares, or roughly $457,000 at today's price.
That puts into perspective the level of capital required to fully replace a government income stream.
Even so, for investors who are building toward that goal over time, high-yield ASX dividend stocks like Harvey Norman can play a role.
However, income investors should always ensure that they have a balanced and diversified investment portfolio, and not put all their eggs in one basket.
