3 top income shares for retirees

With rates going nowhere for some time, if I were a retiree I would look to the share market for a source of income.

After all, with an average dividend yield of approximately 4%, the share market offers income investors far better potential returns than savings accounts and term deposits.

Three shares which I think would be suitable for retirees in search of income are listed below:

Dicker Data Ltd (ASX: DDR)

Dicker Data is a robust, founder-led business with directors that have plenty of skin in the game. But importantly for income investors it plans to pay shareholders a generous fully franked dividend of 18 cents per share in FY 2018, which equates to a dividend yield of 6.1% based on its current share price. Another bonus for investors in search of regular income is that it pays this dividend out in quarterly instalments.

National Storage REIT (ASX: NSR)

This storage giant is another robust business rewarding its shareholders with a generous dividend. In FY 2018 the company paid a total annual distribution of 9.6 cents per share to its shareholders, which is the equivalent of a 5.6% yield based on its current share price. Pleasingly, I believe this distribution could grow meaningfully over the next few years as it pushes ahead with its store expansion and redevelopments.

WAM Capital Limited (ASX: WAM)

This listed investment company pays one of the more generous dividends on the local share market. Based on their last traded price, WAM Capital’s shares currently offer income investors a trailing fully franked 6.4% dividend. Considering its track record of dividend increases (this year will be nine years in a row of increases) I expect there’s a good chance this dividend could increase further in FY 2019. Especially given the strong performance of its funds from some quality stock picking.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia has recommended National Storage REIT. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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