If you're in the retirement phase of your life you don't want to be chasing the next hot thing to try to generate the income you need.
I would want only invest in high quality dividend shares that have a track record of reliability, such as these three:
Magellan Global Trust (ASX: MGG)
This is a listed investment trust (LIT) that is operated by Magellan Financial Group Ltd (ASX: MFG) to invest in the highest-quality global shares. Those international names include businesses like Visa, Alphabet (Google), Facebook, Microsoft, Starbucks and so on.
The LIT targets a cash distribution yield of 4%, which is comfortably more than what you can get from a term deposit these days.
Magellan has a track record of outperforming its MSCI World Net Total Return Index benchmark over the short-term and long-term whilst also falling less in negative market periods due to its high cash holding, which is currently around 17% of the portfolio.
Rural Funds Group (ASX: RFF)
Rural Funds is probably my favourite real estate investment trust (REIT) on the ASX. Lots of retirees dream of owning a farm, but owning and operating a small farm is usually a bad financial investment. So why not own a farmland landlord instead?
Rural Funds is the largest agricultural REIT on the ASX and owns a variety of farm types including almonds, macadamias, cattle, cotton, poultry and vineyards. Rural Funds continues to diversify its holdings with different farm types, climactic conditions and tenants. Every year it is lowering its risk profile, whilst owning a good level of water entitlements for tenants to use.
The REIT has rental increases built into its rental contracts, allowing it to confidently predict that the distribution to shareholders can increase by 4% per annum for the foreseeable future.
WAM Research Limited (ASX: WAX)
This is a listed investment company (LIC) that invests in small and medium ASX growth shares where the investment team at Wilson Asset Management see a catalyst to boost the share price.
Over the past seven years the portfolio has generated an average return of 16.4% per annum, which has been used to fund the ever-growing dividend.
With a cash position of almost 24% at the end of March 2019 and a grossed-up dividend yield of 10.6%, I think WAM Research is set up well for retirees.
Foolish takeaway
Each of these shares have very attractive attributes for retirees. At the current prices I would go for Magellan Global Trust because it's trading at a small discount to its underlying assets and it has a much larger investment universe to invest in.
