Australians thinking about retirement, or who have just hung up their proverbial boots, have a lot to think about. One of their top concerns, or at least what should be, is funding those golden years. I think Australian income stocks are the answer.
In Australia, we are blessed with a relatively high, and still climbing, average lifespan. Whilst that is wonderful for our country and its people, it does mean that if someone retires at 67, they need to plan for at least two decades (hopefully more) of job-free income.
Those who are still working can always fall back on their salaries if they make a bad investment. Retirees don't usually have that luxury. So today, let's discuss two ASX dividend income stocks that I think can provide the certainty and reliability that those at or approaching retirement need.
Image source: Getty Images
2 ASX dividend income stocks perfect for retirement
Coles Group Ltd (ASX: COL)
Coles is an ASX 200 blue-chip stock we all know. This supermarket giant offers investors many of the things that a retiree would appreciate. A mature, financially robust company and a leader in a defensive sector? Check. A long history of delivering reliable payouts? Check. Add a propensity to attach full franking credits to those dividends, and one can see why Coles makes for a fine candidate for a retirement portfolio.
I've been impressed with this company's investment in supply chains and automation as well, which will hopefully set Coles up well for the future.
Coles has tended to increase its annual dividends every year since it first listed on the ASX in 2018. At yesterday's closing prices, this income stock was trading on a dividend yield of 3%.
Telstra Group Ltd (ASX: TLS)
Next up, we have another ASX dividend income stock that we all know and may (or may not) love. Telstra is a company that is almost synonymous with dividends on the ASX. It first became a public company in the 1990s and has paid out a strong, market-leading dividend pretty much ever since.
I like Telstra as a retirement investment for many of the reasons I like Coles. It is a highly defensive company for one. Just think what the average household would give up before their mobile phone or connection if times were tough, if you want to validate that claim. It is also the clear market leader when it comes to telecommunication services in Australia. Its mobile network in particular is almost universally regarded as superior to competitors, particularly for Australians who live in rural or regional areas.
Like Coles, Telstra has been ratcheting up its dividends, which have historically often come with full franking credits attached, in recent years. Today, Telstra shares are sitting on a trailing dividend yield of 4.02%.
