Building a retirement portfolio is different from building one purely for growth.
For me, I would want businesses capable of increasing their earnings over time, but I would also place plenty of weight on dependable cash flows, dividends, diversification and companies that can hold up reasonably well through different economic environments.
With that in mind, here is how I would think about building a 10-share ASX retirement portfolio.
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Start with dependable income
I would want a meaningful part of the portfolio invested in companies with relatively predictable cash flow.
Telstra Group Ltd (ASX: TLS) would be one of my first choices. Australians are unlikely to stop needing mobile and internet services in retirement, recessions or booming markets, giving Telstra a large base of recurring revenue.
I would add Transurban Group (ASX: TCL) for exposure to long-life toll road infrastructure. Traffic growth and regular toll increases can help its cash flows rise over time.
APA Group (ASX: APA) would give my retirement portfolio another source of infrastructure income through its extensive energy network.
For exposure to the banking sector, I would probably choose Commonwealth Bank of Australia (ASX: CBA). Its strong market position and history of paying substantial dividends make it a natural retirement candidate in my view.
Add defensive businesses
I think a retirement portfolio also needs defensive companies whose products and services remain important regardless of the economic backdrop.
Coles Group Ltd (ASX: COL) fits that description for me. People need groceries in almost every economic environment, while its supermarket network gives the company a large and established position in Australian retail.
I would also include CSL Ltd (ASX: CSL). Healthcare demand can be resilient, while CSL's global operations and long-term growth opportunities give the portfolio something more than income alone. It also currently offers a reasonable dividend yield.
Then there is Wesfarmers Ltd (ASX: WES). Businesses such as Bunnings and Kmart give Wesfarmers exposure to some of Australia's strongest retail brands, while management has a long record of investing capital across different opportunities.
Keep some growth in the portfolio
Retirement could last for decades, so I would not want to give up on growth.
Goodman Group (ASX: GMG) would be one of my preferred choices here. Its logistics property portfolio already gives it exposure to high-quality global assets, while data centres could become an increasingly important growth engine.
I would also include TechnologyOne Ltd (ASX: TNE). Its recurring software revenue, expanding international presence and long customer relationships give it the kind of compounding potential I would be happy to own for many years.
Finally, I would add Pro Medicus Ltd (ASX: PME). Its medical imaging software has gained significant traction with major healthcare organisations, and I think its international growth runway remains substantial.
These growth shares may not provide the largest dividends today, but they can help the portfolio's earnings base grow over time.
Foolish takeaway
For me, a strong retirement portfolio needs to provide dependable income today, businesses capable of protecting that income, and enough growth to help the portfolio keep pace with a retirement that could last 20 years or 30 years.
I think this mix would give me all three.
