If you're hoping to retire with the support of some handy extra passive income, you may want to consider the benefits of owning S&P/ASX 200 Index (ASX: XJO) dividend shares.
Particularly those companies that pay fully franked dividends. This can make a sizeable difference to the amount of passive income you get to hold onto at tax time. Especially once you've retired.
We'll look at four top ASX 200 dividend shares below that I'd buy for passive income heading into retirement.
Do note, however, that a properly diversified income portfolio should contain a larger number of stocks to reduce the overall investment risk. While there's no magic number, 10 is a decent yardstick, ideally operating in various sectors and locations.
Also, remember that the yields you generally see quoted are trailing yields. Future yields may be higher or lower, depending on a range of company-specific and macroeconomic factors.
With that said…
Four ASX 200 dividend stocks for passive income in retirement
The first company I'd buy for passive income if I were hoping to retire is ASX 200 bank stock Bendigo and Adelaide Bank Ltd (ASX: BEN).
Over the past 12 months, Bendigo Bank paid a fully franked final dividend of 32 cents per share on 29 September and an interim dividend of 30 cents per share on 26 March. This equates to a full year's payout of 62 cents per share.
At Friday's closing price of $10.89 a share, this ASX dividend stock trades on a fully franked trailing yield of 5.69%. The Bendigo share price is up 24.74% over 12 months.
The second ASX 200 dividend stock I'd buy for passive income to boost my retirement is mining giant BHP Group Ltd (ASX: BHP).
BHP's dividends have come down from the all-time highs we saw in 2021 and 2022 amid a retrace in iron ore prices. But I think the future income potential from the miner looks strong, regardless of what happens with its ongoing takeover efforts of Anglo American (LSE: AAL).
BHP paid a final fully franked dividend of $1.251 a share on 28 September and an interim dividend of $1.096 on 28 March. That works out to $2.347 per share for the full year.
At Friday's closing price of $44.64, BHP shares trade on a fully franked trailing yield of 5.26%. The BHP share price is up 4.25% over 12 months.
Which brings us to the third ASX 200 dividend share I'd buy for passive income to boost my retirement, bank stock Commonwealth Bank of Australia (ASX: CBA).
Australia's biggest bank paid a final fully franked dividend of $2.40 per share on 28 September. That was up 14% from the prior final dividend. CBA increased its interim dividend by 2.4% to $2.15 per share. Eligible investors will have seen that hit their bank account on 28 March.
All told then, CBA paid a total of $4.55 in dividends over the full year. At Friday's closing price of $118.87, CBA shares trade on a fully franked trailing yield of 3.83%. The CBA share price is up 18.95% over 12 months.
Which brings us to the fourth ASX 200 dividend share I'd buy for passive income now in preparation for retirement, coal stock New Hope Corp Ltd (ASX: NHC).
Although coal prices have come off the boil from their own record highs, I believe strong global demand should support prices at current levels and potentially see them tick higher approaching northern winter this year.
As for the past 12 months, New Hope paid a final fully franked dividend of 30 cents per share on 7 November and an interim dividend of 17 cents per share on 1 May for a full-year passive income payout of 47 cents per share.
At Friday's closing price of $4.98 a share, New Hope shares trade on a fully franked trailing yield of 7.63%. The New Hope share price is down 5.14% over 12 months.
