If you're looking to secure a steady stream of income well into retirement (or even before), then how you structure your portfolio today could make all the difference.

One strategy for income-focused investors is to build a high-quality dividend portfolio designed to generate passive income — potentially for life.

Let's look at how a $42,000 investment could be allocated to a handful of reliable ASX dividend shares, with the goal of creating a sustainable income stream backed by real businesses with enduring competitive advantages.

Start with essential services

Telstra Group Ltd (ASX: TLS) might not be the most exciting stock on the ASX, but its importance to everyday life — and its consistent dividend history — makes it a standout for income-seeking investors. With a strong position in mobile and broadband markets, plus ongoing investment in 5G and digital infrastructure, Telstra continues to deliver dependable cash flows. That makes it a solid foundation for any dividend portfolio.

Another essential provider is Coles Group Ltd (ASX: COL). Supermarket spending remains remarkably stable across economic cycles, and Coles has proven its ability to pass on inflation while maintaining margins. While its growth may be modest, its dividend reliability is anything but.

Add resource-backed yield

For those comfortable with a little more volatility, BHP Group Ltd (ASX: BHP) offers income and global exposure. BHP is one of the world's largest miners and a consistent dividend payer when commodity markets are in favour.

While its earnings are cyclical, its low-cost operations and diversified portfolio across iron ore, copper, and potash help underpin generous payouts.

Further diversification

IPH Ltd (ASX: IPH) brings something different to the table — a growing intellectual property business with a generous dividend and strong earnings resilience. As demand for innovation rises globally, IPH's services remain in demand across legal and patent markets.

Finally, HomeCo Daily Needs REIT (ASX: HDN) rounds out this portfolio by providing stable rental income through a diversified portfolio of neighbourhood retail properties. Tenants include major supermarket chains and essential service providers, making this real estate investment trust a potential anchor for consistent yield.

Putting it all together

A $42,000 portfolio split equally across these five stocks would average a dividend yield close to 5.25% based on current levels. That's around $2,200 per year in passive income — and potentially more over time as companies increase dividends.

Better yet, by reinvesting dividends and continuing to top up your portfolio with fresh capital, the compounding effect can significantly increase your income stream in the years ahead.

Foolish takeaway

The key to long-term passive income isn't just chasing high yields — it is owning quality businesses that can grow earnings and sustain dividends across economic cycles.

With a carefully chosen mix of telco, retail, resources, healthcare services, and property, a $42,000 portfolio like this could be the cornerstone of income that lasts a lifetime.