295,148 shares of this high-yield ASX dividend stock pays an income equal to the Age Pension

This business has a very high, growing dividend.

The Australian Age Pension is one of the most generous in the world, but I'd rather rely on quality, high-yield ASX dividend stocks.

I appreciate owning businesses that are able to offer a good level of passive income and payout growth over time.

Future Generation Australia Ltd (ASX: FGX) is one of the ASX dividend stocks I'd be comfortable relying on, though not the only one. I believe it's essential to have a diversified portfolio when it comes to dividends.

There are a few aspects that make Future Generation Australia an appealing option.

Woman holding $50 notes with a delighted face.

Image source: Getty Images

Diversification

If I were to rely on an ASX dividend stock to continue paying passive income across all economic conditions, I'd pick an investment with the ability to pay resilient passive income.

Older Australians relying on dividend income from the major ASX bank shares and ASX mining shares have already seen their payouts reduced this decade. COVID-19 hurt bank payouts, while lower iron ore prices led to dividend cuts for the miners.

Future Generation Australia's business model is about having a diversified portfolio of funds from more than a dozen different fund managers. All of those fund managers work for free so that Future Generation Australia can donate 1% of its net assets each year to youth charities.

This investment setup means the fund can offer investors significant diversification – there are more than 450 underlying shares in the portfolio, across different sectors.

High-yield ASX dividend stock

One of the most appealing aspects of Future Generation Australia is the pleasing level of passive income it can provide to our bank accounts.

It grew its annual dividend per share by 0.2 cents in 2025 and I expect it will increase its payout by that amount again in FY26. This would take the annual payout to 7.4 cents per share.

At the time of writing, that possible payout translates into a forward grossed-up dividend yield of 7.9%, including franking credits. In my view, that's superior to the best savings accounts out there, with payout growth potential.  

Rising payout

Future Generation Australia has a great record of dividend growth. For me, this is one of the main reasons why I prefer the ASX dividend stock compared to the age pension.

The business has increased its annual payout every year since 2015 – more than a decade of continuous passive income growth. The 2025 payout was hiked by close to 3%.

I'm not predicting rapid payout growth in the short term, but Future Generation Australia's steady payout progress is a real positive for income-focused investors, considering it already has a very high dividend yield.

How many Future Generation Australia shares would it take to match the Age Pension?

Right now, the maximum Age Pension for a single person is approximately $31,200 annually.

To receive $31,200 annually from Future Generation Australia, an investor would need 295,148 shares based on the potential FY26 payout including the franking credits, or 421,622 shares excluding the franking credits.

I'd suggest Australians should have more than just one high-yield ASX dividend stock in a portfolio, though Future Generation Australia would certainly be an effective inclusion, in my opinion.

Motley Fool contributor Tristan Harrison has positions in Future Generation Australia. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Retirement

Man holding Australian dollar notes, symbolising dividends.
Retirement

54,543 shares of this high-yield ASX dividend stock pay an income equal to the Age Pension

I’m backing this business to continue its amazing payout record.

Read more »

Man holding Australian dollar notes, symbolising dividends.
Retirement

How much do I need to retire on $110,000 a year at 65?

This is what it would take to generate $110,000 a year at 65.

Read more »

Retiree using a laptop outside his house.
Retirement

Retirement just got more expensive. Here's what it costs per year

Australia's benchmark retirement budgeting guide has just been updated.

Read more »

Elder woman typing on her laptop.
Retirement

Why Future Generation Global shares are a retiree's dream for FY27

This business could be exactly what retirees are looking for…

Read more »

a Christmas present wrapped in one hundred dollar notes and finished with a big red bow
Retirement

Gifting money to your kids? How it could accidentally dent your Age Pension

So many retirees overlook Centrelink's strict gifting rules.

Read more »

Elder woman typing on her laptop.
Retirement

6 things Aussies at age 60 need to know about the Age Pension asset test before they retire

The Age Pension is payable to eligible Australians from 67 years old.

Read more »

Couple toasting on the fire with a tent in the background.
Retirement

How much income can you earn and still get the age pension under new rules starting today?

Senior Australians will be able to earn more from wages and investments from 20 September.

Read more »

Elderly couple using laptop at home while drinking a cup of coffee.
Retirement

Age pension rises $37 per fortnight today

Is the pension enough to fund your retirement?

Read more »