You will need waaay more than just $1M. Or else, expect to dip into the principal.

You're correct, but people don't just have one stock in their portfolio. However, if they're living off dividends, their portfolio is likely worth much more than $1M.

Have heard people say they plan to live off their stock dividends in retirement (as a significant part of their income). I'm not sure I understand dividends correctly then.
My company stock is shown to have Dividend & Yield of 0.92 (2.70%) and because I have been there a long time I now have a high amount worth about $100K (I know I need to diversify this).
With $100K surely my dividend payments are about $2,700 a year since the yield is 2.70%? (it's hard for me to tell what I've been paid as it's automatically reinvested).
So in order for dividends to be significant income surely one would need about $1M in the stock?! This would be super risky too!

Perhaps it is only stocks that pay a much higher dividend that someone would be planning to live off dividend payments and/or they keep a large portfolio of many diversified dividend stocks?

Is my understanding correct? Thanks for any replies.