Having survived your roaring 20s and watched your children and your asset base grow through your 30s and 40s, now is the time to kick back and let your portfolio take the reins. With one eye on retirement, the companies you add to your portfolio will ideally reposition your portfolio towards low risk, income-earning companies.
Mighty River Power (ASX: MYT)
New Zealand electricity generator and retailer Mighty River Power is a recent listing to the ASX and produces 17% of the country's electricity. Of this production, 90% comes from renewable resources. Mighty River was marketed as a strong dividend payer during its IPO, with a 2013 yield of 5.5% rising to 6% in 2014.
Insurance Australia Group (ASX: IAG)
Insurance is not renowned as a fast-paced industry, but it is known for strong cash flows and dividends. IAG is a shining example. The company's recent FY14 guidance update reiterated that it is on track to achieve its full-year guidance of an insurance margin of 12.5-14.5% and gross written premium growth of 5-7%.
IAG has a strong strategy in place to maximise earnings from its current market positions across Australia and New Zealand, as well as a growth strategy to achieve 10% of gross written premiums from Asia by 2016. On top of this, IAG pays a 5.9% dividend. This was up 112% in FY13 from 17 cents per share to 36.
Telstra (ASX: TLS)
While Telstra has characteristics that make it a good company to buy in any period of your life, buying it in your 50s allows you to take advantage of the rocketing number of young techno junkies and their unquenchable thirst for instant communications.
Fixed line internet and mobile data usage and cloud storage is still in its infancy, but already there can be no going back and it represents a long-term opportunity for Telstra, a company which already boasts a 5.4% dividend and a strong foothold on the Australian market.
Foolish takeaway
As you ease off the pedal at work and increase the time spent out on the golf course in your 50s, the slower growing, high-dividend-paying companies are the kinds that will help you to transition into a steady stream of passive income.
