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Why I would buy these ASX shares for a retirement portfolio

If you’re nearing retirement then your investment focus may now be on capital preservation and income rather than chasing strong returns with fledgling growth shares.

With that in mind, I have picked out three top shares which I think would be great options for a retirement portfolio. Here’s why I like them:

Rural Funds Group (ASX: RFF)

The first option to consider for a retirement portfolio is Rural Funds. It is an agriculture-focused property group with a diverse portfolio of assets across a number of industries such as cattle, vineyards, and orchards. I’m a big fan of the company due to the quality of its assets and their long term tenancies. As of the end of the first half, its weighted average lease expiry stood at 11.5 years. This gives investors a lot of visibility with its earnings and also its distributions.

Telstra Corporation Ltd (ASX: TLS)

Another option to consider putting into a retirement portfolio is Telstra. I think Telstra is a great option due to its defensive qualities. These have been on display this year, with Telstra one of only a handful of companies that has been able to reaffirm its guidance for FY 2020. Looking beyond the pandemic, I believe Telstra’s outlook is greatly improved and a return to growth could be on the horizon. This is because the NBN headwind is easing and peak pain is expected to be reached within the next 18 months.

Wesfarmers Ltd (ASX: WES)

A final dividend share to consider for a retirement portfolio is Wesfarmers. I think the conglomerate would be worth considering due to its high quality portfolio and the solid growth prospects of its businesses. In addition to this, the company has a sizeable cash balance at present. I suspect that it won’t be long until Wesfarmers makes a couple of acquisitions. And if history is a guide, they will be ones that have the potential to be highly accretive to earnings over the long term. Another positive is that the company pays a good portion of its profits to investors through dividends. This is especially attractive in the current environment of low interest rates.

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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 RURALFUNDS STAPLED and Telstra Limited. The Motley Fool Australia owns shares of Wesfarmers 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.