You can safely draw down 4% per year according to fairly conservative calculations of MMM.

http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need...

It sounds like you're making 1.2% in dividends, but you can (by this calculation) also sell 2.8% of your investments whilst keeping your total pot above inflation.

It depends on the withdrawal rate. See https://en.wikipedia.org/wiki/Trinity_study. Accordingly, you can withdraw more that the 100$ dividends you are getting without reducing the inflation adjusted value of your funds.

The general rule that people use is the 4% rule. If you take your comfortable living amount and divide by 0.04, you will get a rough estimate on how much you will need to retire. This is based off of market returns, primarily invested in index funds. If 40k / year was comfortable, then the target would be 1,000,000.

Are you paying a lot in fees? I would have expected a better return than that.

Very possible since this is a managed account. I am terrified of doing anything in the stock market, unfortunately.

You also should "count" capital gains as well as dividends since dividends offset capital gains.

SEC yield already includes expenses, so it's just 2.99%. (The actual dividend yield is 3.08%. I don't know where the other .06% comes from, but IANAA).