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3 blue-chip shares to boost your retirement income

A lot of private investors with SMSFs or spare cash saved up won’t want to leave it in the bank given a two-year term deposit rate at the Commonwealth Bank of Australia (ASX: CBA) as of today sits at just 2.6%.

Once you adjust for inflation with average consumer prices rising at 1.9% for the year to September 2018 in real terms you’d have only earned 0.7% on your cash if you’re lucky.

Below are three blue-chip shares that more conservative investors could consider to boost their income and hopefully produce a little capital growth too.

After all it no use gaining a 6% yield in a year if the value of your capital investment falls 10%.

Scentre Group (ASX: SCG) is the business behind the Westfield shopping centres in Australia and New Zealand with real estate assets under management of $53.4 billion and shopping centre ownership interests valued at $38.4 billion. It operates 41 shopping centres in ANZ all of which are in premium locations and designed to be best-in-class in terms of design, entertainment, and retail space.

This is important because shopping centres need to be entertainment destinations these days due to the rise of online shopping. Premium rents and foot traffic also mean the landlord can charge its retail clients premium rents.

Over the past year the Westfield operator has paid 21.95 cents per share in dividends on a 5.5% yield, with a reasonable expectation that this will increase over time.

Commonwealth Bank of Australia (ASX: CBA) is not well liked by many professional investors or ‘market commentators’ at the moment due to falling house prices and the perception that Australia is experiencing a mini ‘credit crunch’.

Despite this it today reported a September quarter cash profit up 11% versus the H2 FY 18 quarterly average. The falling share price means this high-quality business now offers a trailing yield of 6.2% plus full franking credits.

Perhaps a better pick in the banking space is Macquarie Group Ltd (ASX: MQG) given it is nowhere near as exposed to Australian housing markets and macro-economic conditions. In fact Macquarie earns two thirds of its income overseas, with much of its exposure in Australia related to investment banking activities. Based on today’ share price of $120.02 Macquarie offers a trailing partly franked yield of 4.5%. However, that is likely to rise given the group is forecasting 10% profit growth in FY 2019.

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Motley Fool contributor Yulia Mosaleva owns shares of Commonwealth Bank of Australia and Macquarie Group Limited. The Motley Fool Australia has recommended Scentre Group. 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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