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Why I’d want these ASX dividend shares in my retirement portfolio

When you’re young and first start investing you might focus on growth shares that offer potentially strong returns like Nearmap Ltd (ASX: NEA).

After all, if things don’t go quite to plan, you have plenty of time to recover from your losses.

But as you enter retirement I believe it would be prudent to put these types of investments on the backburner in favour of those that offer income and capital preservation.

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

National Storage REIT (ASX: NSR)

If this self-storage-focused real estate investment trust isn’t taken over in the coming months, I think it would be a great long term option for retirees. National Storage is one of the largest self-storage operators in the ANZ region and has plans to grow even larger in the coming years through a combination of development projects and its growth through acquisition strategy. This should support solid income and distribution growth. Especially given the improving housing market, which is likely to lead to growing demand for its services. At present the company’s shares provide a 4.5% trailing distribution yield.

Telstra Corporation Ltd (ASX: TLS)

Although Telstra has been a disappointing performer in recent years, I’m confident the telco giant is now over the worst of its issues. Furthermore, I think the company might even be ready to return to growth in the near future thanks to its T22 plan. This plan is stripping out significant costs and making Telstra a leaner and far more efficient operation. Combined with rational competition, the near completion of the NBN rollout, and the arrival of 5G internet, I feel Telstra’s outlook is becoming increasingly positive. Another positive is that its 16 cents per share dividend looks safe based on its free cash flow forecasts. This equates to a fully franked 4.1% dividend yield.

Transurban Group (ASX: TCL)

Another option for retirees to consider buying is Transurban. I believe the toll road operator is one of the best dividend shares on the local market. This is because of its world-class portfolio of toll roads, their defensive qualities, increasing traffic, and strong pricing power. Another positive is Transurban track record of distribution increases. This looks set to continue in FY 2020, with its board intending to increase its distribution to 62 cents per security. Based on its last close price, this works out to be a forward 3.9% distribution yield.

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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 Nearmap Ltd., Telstra Limited, and Transurban Group. 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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