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3 quality ASX dividend shares for your retirement portfolio

When you’re in your 20s or 30s you might seek the high risk, high reward gains from fledgling growth shares. After all, if things don’t go to plan, you have plenty of time to recover your losses.

But as you enter retirement, I think these types of investments should take a backseat. Instead I would focus on investments that offer income and capital preservation.

Three shares which I think are great options for retirees right now are as follows:

BWP Trust (ASX: BWP)

BWP is a real estate investment trust and the landlord of hardware giant Bunnings. Given the quality of the Bunnings business, I feel the probability of store closures and rental defaults is very low. Overall, combined with periodic rental increases, this leaves BWP well-positioned to grow its income and distribution at a solid rate over the next decade. At present its shares provide a trailing 4.3% distribution yield.

Coles Group Ltd (ASX: COL)

Another good option for a retirement portfolio could be this supermarket giant. This is due to its defensive qualities, solid growth prospects thanks to its refreshed strategy, strong market position, and favourable dividend policy. With Coles intending to pay out between 80% and 90% of its earnings to shareholders each year, I estimate that its shares currently offer a fully franked forward 3.5% dividend.

Telstra Corporation Ltd (ASX: TLS)

With the end of the NBN rollout in sight, the arrival of 5G, and the return of rational competition, I think Telstra’s outlook is improving fast. Furthermore, with the telco giant aiming to cut its costs materially over the next couple of years, I’m confident its free cash flow will be sufficient to maintain its current dividend. This could make it worth considering as part of a retirement portfolio. Presently, its shares offer a trailing fully franked 4.6% dividend.

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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 Telstra Limited. 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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