ASX blue-chip shares are some of the biggest and strongest businesses on the ASX, which could be exactly what retirees are looking for.
I wouldn't want to invest in a business with my nest egg if I wasn't sure that company would be around for at least the next decade or two.
If I were a retiree, I'd want to own businesses that have already been around for a long time and have shown longevity. I'd also only want to choose businesses that I have a good level of confidence in and will be able to last for the rest of my life.
Wesfarmers Ltd (ASX: WES)
Wesfarmers' history dates back over 100 years, and now, in my opinion, it's one of Australia's best retailers. Its operations include Bunnings, Kmart, and Officeworks, which I would call category leaders.
The last four and a half years have shown how important Wesfarmers' businesses are to the Australian public, with its ability to offer value on products needed for work, entertainment, education, DIY, construction, and so on.
In my opinion, the company's ability to perform under all business conditions makes it an appealing pick for a retiree portfolio.
That stable profit performance could mean a more resilient share price and dividend when times get rocky. The ASX blue-chip share also has an impressive balance sheet with good funding for its operations and potential acquisitions.
Of all the current retailers on the ASX, I think Wesfarmers is likely to be one of the longest-surviving because of its diversified nature.
According to the forecast on Commsec, Wesfarmers is expected to grow its annual dividend per share to $2.36 by FY26, which translates into a forward grossed-up dividend yield of 4.8%.
Rio Tinto Ltd (ASX: RIO)
Rio Tinto is one of the biggest miners in the world. The business is involved in a number of commodities, including iron ore, copper, aluminium and bauxite.
Commodities are always needed to produce certain goods. Rio Tinto's resources are needed for things like (electric) vehicle production, renewable energy farms and many other uses.
I think it's a good time to look at the ASX blue-chip share because some of its key commodities, particularly iron ore, have sunk since the start of 2024.
ASX mining shares are typically cyclical, so it's wise to buy them when the sector is weak. Reduced Chinese demand has created a situation for investors to buy Rio Tinto shares at a cheaper price.
Rio Tinto believes copper demand is going to increase by between 1.5% to 2.5% per year, which could bode well for the copper price in the coming years.
According to the Commsec forecast, Rio Tinto is predicted to pay an annual dividend per share of $5.72 in FY26. This would translate into a grossed-up dividend yield of 5.3%.
