Personally, I think it is the best of the suggestions that have been put forward so far.
I'll put a vote in for Sydboy007. In my view, he's actually closest to the mark. It seems this is a serious question.
$30kpa. Not a lot of money. No margin for error. Melbourne Institute Sept 2013 poverty line for a couple which does not work (and hence does not incur working expenses) is $20k. That's poverty.
Assumption: You do not want to live in poverty.
Assumption: You can't stand the thought of living in poverty.
The least risky....as opposed to riskless...thing you can do is buy Australian Treasury Indexed Bonds. These are currently trading at 2% real and could be regarded as expensive in absolute terms. This should not be directly compared to the figures provided by Sydboy007 for Southbank or Sydney Airport. FIIG adjusts their quoted yields for an expected inflation rate of 2.5% flat forever.
If you can assume that the real yield curve for the rest of your life will remain at 2% real (and it won't), you will need $600k. You will have next to nothing on expected death. To the extent the coupon does not meet your current income needs, you sell the bonds required to meet them. In reality you'd do all sorts of stuff to mix the durations/maturities of the bonds to best meet your needs and sell them in a precise formulation. You get the point.
This amount will fund you for $30k per annum inflated by CPI. In the event that CPI should fall below the level at the time the bond was issued, your coupon won't fall any further and you will feel richer, but the world economy is probably collapsing.
Assumption: Your income needs will increase at the rate of inflation.
As these bonds mature, you will need to roll them. There is absolutely no assurance at all that you will be able to get 2% real on the roll. So...you need to allow a risk margin.
I am guessing that you do not want to live on anything much less than $30kpa. All this is pre-tax. If so, this is what you do: Buy TIBs...on the ASX. You can't take risk.
It has been suggested that hybrids and other higher yield securities might help. It might..it might not. This adds risk. And...you may not be in any position to absorb a credit event. We just went through one. Typically, hybrids and 2nd tier will be completely wiped out or have nominal recovery. Senior debt gets 30% recovery. The yield gap reflects credit risk. This credit risk is not free money. Hybrids also contain derivatives in their payoff description. Essentially they have options embedded in them to enhance the yield. This is not a free lunch. Some investors call them "death bonds". For those inclined, the typical structure is an embedded collar, with a written put on the left wing.
I wrote about yield compression. Sydney Airport Finance recently issued a tranche of 10 year nominal bonds in Europe for only 100 bps over government. This is a security rated at the lowest rung of investment grade....ring any alarm bells? This pricing is essentially the same as per what their indexed securities are offered for, just in a different format.
Dude/Dudette your most riskless assets are TIBS. You will need to hold a margin over $600k, maybe $700k just to feel vaguely ok you won't slide into abject poverty from an investment angle. Any deviation from this brings risk and you have virtually no margin. As others have pointed out, your $30k probably doesn't make allowance for life events. Again, to the extent you do not want such developments to push you into poverty, you need to make allowance. If you happen to have more than something like 800-900k then, perhaps, go get funky with some of your hard-earned.
Bill M's analysis was accurate. The main difference between what he has calculated and the above is that he is using an assumed nominal interest rate and a fixed rate of inflation. In reality, you have no real idea...well some here seem to...of how the yield curve will evolve over the rest of your life. You do not know how interest rates will move against inflation. So there is no margin at all for the real return spread risk in there. The above hedges that.
Relative to a portfolio of stock with seemingly attractive yields....when the stock price dives, you can't hold. The peak to trough exceeded 50% in the GFC..big falls happened in Iraq II, Asian/Russian crisis, 1987...it will happen in your lifetime over and over. You can't hold because doing so brings the risk of poverty higher. Although some people seem to think it's easy, try it when you're sitting there watching your portfolio shrink by 50%. Please try it. You cannot know that the markets will recover or your cash dividends (as opposed to yields) will recover and you must protect your margin. Those who argue value/reversion have a point. But, you can only do it if you are in a position to absorb loss. You are not if you are looking at $30kpa as a living allowance and asking questions about the minimum required to get there. If you have to ask...you probably can't afford it [no disrespect, just a phrase]. I'll bet you've done your sums and this is the least you feel vaguely comfortable with. Maybe if you turn your car over every 10 instead of 5 years and patch your shoes, you could get by on $25k...but $20k...that's too harsh. You know what I mean. Naturally, if you have excess assets to the figures above, you have risk buffer and can go for it.
Hope this helps a little.
Disclaimer: This is not advice. I am describing a hypothetical scenario. I do not know your circumstances. I am not recommending the purchase or sale of any security. I am not recommending FIIG or its officers or subsidiaries. I do have an account with FIIG. Please do your own work.