Here's a revealing data point: older Americans are scared more of outliving wealth than of death itself.And unfortunately, even retirees who have built a nest egg have good reason to be concerned - with the traditional approaches to retirement planning, income may no longer cover expenses. That means retirees are dipping into principal to make ends meet, setting up a race against time between dwindling investment balances and longer lifespans.In today's economic environment, traditional income investments are not working.In the past, investors going into retirement could invest in bonds and count on attractive yields to produce steady, reliable income streams to fund a predictable retirement. 10-year Treasury bond rates in the late 1990s hovered around 6.50%, whereas at the time of this article, the current rate is under 2% and looks to stay low thanks to an accommodative Fed.The effect of this drop in rates is substantial: over 20 years, the change in yield for a $1 million investment in 10-year Treasuries is over $1 million.In addition to the considerable drop in bond yields, today's retirees are nervous about their future Social Security benefits. Because of certain demographic factors, it's been estimated that the funds that pay the Social Security benefits will run out of money in 2035.How can you avoid dipping into your principal when the investments you counted on in retirement aren't producing income? You can only cut your expenses so far, and the only other option is to find a different investment vehicle to generate income.Invest in Dividend StocksAs a replacement for low yielding Treasury bonds (and other bond options), we believe dividend-paying stocks from high quality companies offer low risk and stable, predictable income investors in retirement seek.For example, AT&T and Coca-Cola are income stocks with attractive dividend yields of 3% or better. Look for stocks like this that have paid steady, increasing dividends for years (or decades), and have not cut their dividends even during recessions.One way to identify suitable candidates is to look for stocks with an average dividend yield of 3%, and positive average annual dividend growth. Many stocks increase dividends over time, helping to offset the effects of inflation.Here are three dividend-paying stocks retirees should consider for their nest egg portfolio.Astrazeneca (AZN) is currently shelling out a dividend of $0.93 per share, with a dividend yield of 4.25%. This compares to the Large Cap Pharmaceuticals industry's yield of 2.63% and the S&P 500's yield of 2.07%. In terms of dividend growth, the company's current annualized dividend of $1.86 is flat compared to last year.Franklin Resources (BEN) is paying out a dividend of 0.27 per share at the moment, with a dividend yield of 4.96% compared to the Financial - Investment Management industry's yield of 2.22% and the S&P 500's yield. Taking a look at the company's dividend growth, its current annualized dividend of $1.08 is up 3.85% from last year.Currently paying a dividend of 0.28 per share, Brixmor Property (BRX) has a dividend yield of 6.26%. This is compared to the REIT and Equity Trust - Retail industry's yield of 4.9% and the S&P 500's current yield. Looking at dividend growth, the company's current annualized dividend of $1.14 is up 1.82% from last year.But aren't stocks generally more risky than bonds?The fact is that stocks, as an asset class, carry more risk than bonds. To counterbalance this, invest in superior quality dividend stocks that not only can grow over time but more significantly, can also decrease your overall portfolio volatility with respect to the broader stock market.A silver lining to owning dividend stocks for your retirement portfolio is that many companies, especially blue chip stocks, increase their dividends over time, helping offset the effects of inflation on your potential retirement income.Thinking about dividend-focused mutual funds or ETFs? Watch out for fees.If you prefer investing in funds or ETFs compared to individual stocks, you can still pursue a dividend income strategy. However, it's important to know the fees charged by each fund or ETF, which can ultimately reduce your dividend income, working against your strategy. Do your homework and make sure you know the fees charged by any fund before you invest.Bottom LineWhether you select high-quality, low-fee funds or stocks, seeking the steady income of dividend-paying equities can potentially offer you a path to a better and more stress-free retirement.Generating income is just one aspect of planning for a comfortable retirement.To learn more ways to maximize your assets - and avoid pitfalls that could jeopardize your financial security - download our free report:Will You Retire a Multi-Millionaire? 7 Things You Can Do NowThis helpful guide offers our viewpoints about strategic retirement investment planning, based on decades of experience helping our clients prepare for financial security during their golden years. Get Your FREE Guide Now AstraZeneca PLC (AZN): Free Stock Analysis Report Franklin Resources, Inc. (BEN): Free Stock Analysis Report Brixmor Property Group Inc. (BRX): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research