Are you currently in or, perhaps, nearing retirement? Are you looking for a good strategy to get some extra income?
I believe that investing in ASX shares which pay high dividends is an excellent strategy for generating retirement income.
They are also a much better alternative to keeping your money in a savings account or term deposit. The interest earned with these options often doesn't even cover inflation.
So, with that said, here are 2 of my top ASX dividend share picks to buy now to provide you with extra income in retirement: BHP Group Ltd (ASX: BHP) and Macquarie Group Ltd (ASX: MQG).
BHP
BHP is my pick of mining shares on the ASX right now.
It has diversified operations across a range of divisions including iron ore, copper and aluminium, underpinned by a strong balance sheet.
The mining giant recently revealed that it expects to continue generating solid cash flow in its April quarterly activities report. It also revealed that its production guidance for the current financial year remains unchanged, despite the challenges faced by the coronavirus crisis.
Although demand for its products has slowed somewhat in key markets like the US, there are signs of recovery in China.
There are also early signs that economic conditions in Australia are starting to look increasingly favourable.
Therefore the demand for iron ore, in particular, could pick up in the second half of the year. Also, the Australian Government's intention to stimulate our local economy with a range of new infrastructure projects could generate further local demand.
Based on current earnings, BHP also offers a very attractive forward fully franked dividend yield of around 6%. This would add nicely to your retirement income stream.
Macquarie
Macquarie is a global financial services business with a core focus on international investment banking.
I prefer Macquarie over Australia's big four major banks: Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd. (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ).
Over the past few years, Macquarie has become a more balanced and diversified business rather than being too focused on a small product set. This was a key reason why its share price was hit so hard during the global financial crisis.
Based on current earnings, Macquarie also offers a healthy forward fully franked dividend yield of around 3.8%. This could provide you with an attractive additional retirement share income stream.
