When you're young and first start out investing you might focus on growth shares that offer potentially strong returns like buy now pay later provider Sezzle Inc (ASX: SZL).
After all, if things don't go well you have plenty of time to recover your losses. But as you near retirement, I believe it would be prudent to put these types of investments aside and focus on those that offer income and capital preservation.
With that in mind, here are two ASX shares that I think are top options for a retirement portfolio:
Coles Group Ltd (ASX: COL)
The first option to consider buying is Coles. I think the supermarket giant could be one of the best picks for a retirement portfolio due to its defensive qualities, solid growth prospects, and strong market position. Another positive is that it has a favourable dividend policy. This policy sees Coles aim to pay out between 80% and 90% of its earnings to shareholders. Based on the current Coles share price, I estimate that it currently offers investors a fully franked ~3.5% FY 2021 dividend.
Lendlease Group (ASX: LLC)
Another option to consider for a retirement portfolio is Lendlease. This international property and infrastructure company has had a disappointing 12 months because of the pandemic, but I'm confident the worst is now behind it. This could make it an opportune time to invest, especially given its positive long term outlook. Lendlease has a very lucrative development pipeline which I expect to underpin solid earnings and dividend growth in the 2020s. This includes its agreement with Google to develop the tech giant's landholdings in San Jose, Sunnyvale, and Mountain View into mixed-use communities. Another positive is its generous dividend yield. Based on the latest Lendlease share price, I estimate that its shares will offer investors a fully franked 4.9% dividend yield in FY 2021.
