Want rock-solid retirement income? I'd buy these two ASX shares

I think these are two of the most appealing dividend investments for retirees.

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Key points
  • ASX shares Sonic Healthcare and MFF Capital Investments are top picks for retirees seeking dependable and potentially increasing dividend income over time.
  • Sonic Healthcare has a defensive sector positioning and consistent dividend growth, supported by aging populations and strategic use of technology.
  • MFF Capital has a high-quality, diversified investment portfolio, offering potential for pleasing and growing dividends, underpinned by valuable franking credits and profit reserves.

I believe it's essential that retirees have a high degree of confidence that their expected passive income becomes real payments. Certain ASX shares can be a wonderful option for that purpose.

If I were living off dividend payments, I'd want to invest in businesses that are very likely to continue sending their dividend payments to my bank account and hopefully increase the payout to me over time.

Not every dividend-paying business will necessarily be a good pick for reliable passive income. Several major ASX shares have reduced their payouts over the last five years due to COVID-19 disruptions, high inflation, or lower iron ore prices.

But, I'm confident about the following businesses continuing to make pleasing dividend payments.

Group of retirees enjoying yoga, symbolising retirement.

Image source: Getty Images

Sonic Healthcare Ltd (ASX: SHL)

Sonic Healthcare is a major player in the pathology space, with a large presence in Australia, Germany, Switzerland, the UK, and the US.

I view healthcare as one of the most defensive sectors, giving it pleasingly resilient revenue and earnings. People don't get sick based on what's happening with the latest GDP or inflation numbers.

Sonic Healthcare has increased its annual payout almost every year in the last three decades, with no dividend reductions during the period. It has already demonstrated an excellent track record of rock-solid payments for retirement income.

I believe the passive income is likely to increase in the coming years. Firstly, the company itself said in its FY25 results that "future earnings growth [is] expected to support progressive dividend strategy".

The company is benefiting from ageing and growing populations in its key markets, which is helping organic growth. Plus, acquisitions are helping expand its presence. If Sonic can continue utilising new technology such as AI within its operations, then profit margins, the bottom line, and patient outcomes could improve further.

The ASX share grew its annual payout by 1% to $1.07 per share in FY25, which translates into a dividend yield of 4.75%, excluding franking credits. That's an excellent starting yield for retirement income, in my opinion.

MFF Capital Investments Ltd (ASX: MFF)

MFF is one of my favourites for passive income because of its diversified and high-quality investment portfolio.

Most of its efforts are focused on running an investment portfolio. That portfolio is full of excellent international businesses that are long-term winners, which may continue delivering pleasing earnings growth for many years ahead.

We're talking about names like Mastercard, Visa, Meta Platforms, Amazon, Alphabet, and Microsoft.

It looks good value to me right now. At the time of writing, the MFF share price is trading at an approximate discount of 10% to the weekly net tangible assets (NTA) at 5 September 2025.

I believe the business is capable of providing solid investment returns over the long term, which will allow it to pay a pleasing and growing dividend in the years ahead. Its normal payout has increased each year since 2018. In FY25, it grew its payout by 30% to 17 cents per share.

In terms of its commitment to increasing payouts, MFF said in its FY25 result that it has:

Additional focus on stable and growing dividends over time – 100% franking backed by $201 million in franking credits and profit reserves of ~$1.7 billion as at 30 June 2025.

At the time of writing, the FY25 payout translates into a grossed-up dividend yield of around 5%, including franking credits. That's a great yield for retirement income, in my opinion.

Motley Fool contributor Tristan Harrison has positions in Mff Capital Investments. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Mastercard, Meta Platforms, Microsoft, and Visa. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Alphabet, Amazon, Mastercard, Meta Platforms, Mff Capital Investments, Microsoft, Sonic Healthcare, and Visa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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