The Motley Fool

2 ASX 50 shares to buy for your retirement portfolio

When you’re young and first start investing you might focus more on growth shares that offer strong potential returns like Afterpay Ltd (ASX: APT) or Zip Co Ltd (ASX: Z1P).

This is because if things don’t go to plan with these investments, you have plenty of time to recover from your losses.

But as you enter retirement, I feel the prudent thing to do is to limit these investments to just a very small part of your portfolio and focus on shares that offer income and capital preservation.

With that in mind, two shares which I think are great for retirees right now are as follows:

Goodman Group (ASX: GMG)

I think Goodman Group could be a good option for retirees. It is an integrated commercial and industrial property group which owns, develops and manages industrial real estate in 17 countries. This includes warehouses, large scale logistics facilities, and business and office parks.

Goodman Group has made some very smart investments over the last decade. This was particularly the case with its decision to gain exposure to the structural tailwinds of the ecommerce market. It has direct relationships with some of the biggest operators such as Amazon and Walmart. Given how quickly online shopping is growing, these assets are likely to be in demand for a long time to come and should underpin solid earnings and distribution growth over the next decade.

Telstra Corporation Ltd (ASX: TLS)

Telstra is the undisputed leader in the telco sector with a massive 18.5 million retail mobile services and 3.7 million retail bundle and data services. While the last few years have been difficult for the company because of the NBN rollout, it is making very strong progress with its T22 strategy. Based on its half year update, the company is well on its way to simplifying its business, cutting costs materially, and carving out a leadership position in 5G.

And with FY 2021 expected to be the peak year of the NBN headwind, I feel that a return to growth is on the card in the near future. In the meantime, I’m optimistic that its dividend is sustainable at 16 cents per share and no further dividend cuts are necessary. If this proves accurate, then Telstra’s shares offer a generous fully franked forward 5% dividend yield at present.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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.