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3 ASX shares for a reliable retirement portfolio

If I were retired I’d want a reliable portfolio full of quality ASX shares that could provide the income I need.

It’s no use if the income I’m paid jumps around or completely crashes in one bad year.

That’s why I think following three ASX shares would be good for a reliable retirement portfolio:

WAM Leaders Ltd (ASX: WLE)

Larger businesses have a reputation as having sturdier dividend payouts compared to smaller, more volatile businesses.

This listed investment company (LIC) focuses on 200 of the largest shares of the ASX. Since inception in May 2016 the WAM Leaders portfolio has outperformed the S&P/ASX 200 Accumulation Index before fees and expenses. WAM Leaders’ top 20 holdings are similar to the ASX 20.

WAM Leaders has been building up its profit reserve and has also been paying a growing dividend over the past two years. It currently has a grossed-up dividend yield of 6.35%.

I believe that the skill of the WAM Leaders investment team will lead to continued outperformance over the long-term whether the index grows or falls. It certainly trades at a more attractive NTA valuation compared to its WAM LIC peers like WAM Capital Limited (ASX: WAM).

Rural Funds Group (ASX: RFF)

This real estate investment trust (REIT) is the largest purely-agricultural ASX landlord.

The performance of food businesses have much less to do with the economy than other industries, which is why Rural Funds could be a good alternative choice with its farms like cattle, vineyards and almonds.

One of the main reasons why I think this share could be really good retirement option is because management target long-term growth of the distribution by at least 4% due to the rental indexation built into the rental contracts.

With a starting distribution yield of 4.94% for FY19 I think Rural Funds could be one of the best shares on the ASX for retirees.

Challenger Ltd (ASX: CGF)

Challenger is the country’s leading provider of retirement income options, namely annuities. If Labor win then both negative gearing and franking credits could become less attractive for investors, making annuities seem more attractive in comparison.

However, instead of getting an annuity you could just invest in the company itself which is predicted to do well over the next decade with the number of over-65s projected to grow by 40% over the next 10 years.

Challenger currently has a grossed-up dividend yield of 4.8%.

Foolish takeaway

All three shares look like quality, reliable businesses to me. At the current prices and yields I think all would be good for dividend investors. However, if I had to choose one today based on the valuation it would be Challenger because it’s trading at under 15x FY19’s estimated earnings.

Another share that could be really good for retirees is this very defensive share that is the market-leader in Australia & New Zealand and now it’s expanding to Asia – opening more growth channels.

One of the most dividend shares on the ASX

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

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Motley Fool contributor Tristan Harrison owns shares of Challenger Limited and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended Challenger Limited and RURALFUNDS STAPLED. 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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