2 top ASX dividend shares for retirees

These two stocks can help pay your bills in retirement.

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Key points

  • Retirees prioritise maximising dividend income due to reliance on passive income streams, making it crucial over overall returns.
  • The Vanguard Australian Shares High Yield ETF offers a diverse portfolio of high-income ASX shares with a trailing yield of 8.54%, paid quarterly.
  • Coles provides a defensive earnings base with fully franked dividends, maintaining a strong dividend track record since 2019 with a yield of over 3%.

If you're retired, or at least approaching retirement, chances are you have different goals from other ASX investors. While those who are working can enjoy a primary stream of income from their jobs, retirees often have to depend on passive, secondary income, either from ASX dividend shares or other sources, to pay their bills.

That makes maximising dividend income a priority for these investors, even above maximising overall returns.

With this in mind, let's discuss three top ASX dividend shares that retirees might like to consider buying for income today.

Two top ASX dividend shares for a comfortable retirement

Vanguard Australian Shares High Yield ETF (ASX: VHY)

First up, we have this exchange-traded fund (ETF) from Vanguard. As you might know, ETFs usually hold an underlying portfolio of other shares that one buys a stake in when purchasing that ETF's units. In this case, VHY holds about 75 ASX dividend shares that have all been selected based on both their history of paying out sizeable dividends, as well as their perceived capacity to continue to do so.

In this ETF's portfolio, you'll typically find the usual suspects, ranging from the major banks to BHP Group Ltd (ASX: BHP), Telstra Group Ltd (ASX: TLS), Woodside Energy Group Ltd (ASX: WDS), and Transurban Group (ASX: TCL).

The Vanguard Australian Shares High Yield ETF pays out a quarterly dividend distribution. At recent pricing, VHY units were trading at a trailing yield of 8.54% (although investors shouldn't expect that to continue indefinitely).

Coles Group Ltd (ASX: COL)

Next up, we have what is no doubt a familiar face in Coles Group. Coles runs the second-largest network of supermarkets in the country, as well as the Liquorland bottle-shop chains. I like this ASX dividend share for income as it is able to pay out its fully franked dividends out of a highly defensive earnings base. As its stores sell items that we tend to need rather than want, it should see customers continuing to come through its doors as long as it remains competitive with its pricing.

Coles has also spent the seven years since its ASX listing building up a strong dividend track record. It has delivered an annual dividend increase to its shareholders since 2019, including in 2025.

This ASX dividend share has increased markedly in value over the past two years or so, which has whittled its dividend yield somewhat. Even so, the company still has a fully franked yield of just over 3% on the table.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Telstra Group and Transurban Group. The Motley Fool Australia has recommended BHP Group and Vanguard Australian Shares High Yield ETF. 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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