When you first start investing, you might look for high risk, high reward growth shares.
After all, if things don't go to plan, you have plenty of time to recover.
But when you're in retirement, I think it is best to focus on income and capital preservation.
With that in mind, below I have picked out two shares which I think are safe options for retirees to buy right now. They are as follows:
Coles Group Ltd (ASX: COL)
The first option to consider for a retirement portfolio is this supermarket giant. I'm a big fan of Coles due to its solid growth prospects, refreshed strategy, its generous dividend policy, and its defensive qualities. The latter was on display for all to see with its strong performance in FY 2020 despite the pandemic.
For the 12 months ended 30 June 2020, Coles delivered a 6.9% increase in sales to $37.4 billion and a 7.1% lift in net profit after tax to $951 million. It also revealed that its same store sales growth had been strong early in the financial year. And while its growth is likely to moderate a touch once the pandemic passes, I remain confident that it is still well-positioned to grow its earnings and dividend at a solid rate long into the future. For this reason, I think it could be a fantastic option for retirees today.
Telstra Corporation Ltd (ASX: TLS)
Another option for a retirement portfolio could be Telstra. While Telstra has been a terrible investment for retirees over the last few years, I believe the tide is finally turning and a return to growth could be on the horizon in the near future. This is due to its strong market position, rampant cost cutting, the easing NBN headwind, and the arrival of 5G.
In respect to the latter, I expect the upcoming release of the new iPhone to kickstart its adoption in Australia. This should be a big boost to Telstra's all-important mobile revenues. Another positive is that the Telstra board has recently advised that it will do all that it can to maintain its 16 cents per share fully franked dividend. Based on the current Telstra share price, this represents a generous 5.6% yield.
