Compounding is a very powerful tool that can help grow a dollar into significantly more over the years.

We don't need to run these businesses ourselves. That's up to management and all other staff at those companies.

Whether that's some of the world's biggest companies or some of the up-and-coming ASX shares, we can invest in ideas that can grow over time.

By regularly investing, spending less than we earn, and possibly using superannuation, an Aussie can build a very rewarding level of annual passive income.

Let's get into what it would take if someone wants to reach $85,000 of investment income each year by 50.

Compounding and building wealth

Compounding helps accelerate our net worth because we don't need to add as much money to reach a financial goal.

For example, if someone invested $500 per month and it returned 10% per year, it would be worth $1.09 million after 31 years. About $905,000 of that total would come from returns, and only $186,000 would come from the actual deposits.

But I'm sure readers wanting to retire at 50 will want to reach their goal faster than 31 years.

So, let's assume share market investments continue to return an average of around 10% and run through a few scenarios.

First, let's double the monthly investment to $1,000 and see what happens then.

By investing $1,000 per month, a 25-year-old investor could reach $1.18 million after 25 years.

If someone aged 30 invested $2,000 per month, they could reach a portfolio value of $1.375 million.

Maybe someone is aged 35 and they have just 15 years to reach 50. Let's imagine that person saves really hard and invests $3,500 per month. That could reach $1.33 million in that time.

Everyone has a different financial position, so I don't know how much each household can save, but the above shows how people can regularly put money toward their net worth and eventually retire early.  

Unlocking $85,000 a year of annual passive income

Getting $85,000 each year would be a very good amount to retire on.

However, it would require investors from the above examples to target solid grossed-up dividend yields which typically include franking credits.

For example, accessing $85,000 on a $1.18 million portfolio means finding a 7.2% dividend yield. The sorts of businesses I'd target for that yield include Future Generation Australia Ltd (ASX: FGX), Future Generation Global Ltd (ASX: FGG), Charter Hall Long WALE REIT (ASX: CLW), Dexus Industria REIT (ASX: DXI) and WCM Global Growth Ltd (ASX: WQG).

The other end of my target was generating $85,000 from a $1.375 million portfolio. This works out to be a dividend yield of 6.2%. With that target in mind, I'd look at stocks like MFF Capital Investments Ltd (ASX: MFF), Centuria Industrial REIT (ASX: CIP), and
PM Capital Global Opportunities Fund Ltd (ASX: PGF).

By mixing a portfolio of good local shares and international exposure, retirees can build a pleasing stream of passive income, such as $85,000 by age 50.

The post How much do I need to retire on $85,000 a year at 50? appeared first on The Motley Fool Australia.

I imagine plenty of retirees have an outsized amount of their investment portfolios focused on Australian property, ASX bank shares and ASX mining shares.

So, an ASX dividend share that provides international investment exposure and attractive passive income could be exactly what some retiree investors need.

Let's run through some of the positives.

Diversification

Future Generation Global is a listed investment company (LIC) that aims to deliver a combination of income and capital growth over the medium-to-long-term by investing global equities. I think it's a great option for diversification.

It uses a fund-of-funds model, which provides shareholders with access to a professionally constructed portfolio of leading globally-focused fund managers.

There are currently 15 fund managers involved in the portfolio, including Antipodes, Munro, Holowesko Partners, Vinva, WCM, Platto, Paradice, Langdon and Morphic.

The portfolio is invested across various sectors and geographic markets. At the end of August 2026, 54.6% was in invested in the North American share market (less than the global share market), 19.3% was invested in the UK and Europe (more than the global share market), 9.2% was invested in Asia, 4.6% was invested in other developed markets and 1.5% was invested in emerging markets.

As you can see, the ASX dividend share offers plenty of diversification for Aussies. There are many hundreds of underlying businesses within the portfolio.

Philanthropy

The fund managers involved generously work pro bono – for free – which means they waive all management and performance fees. That allows Future Generation Global to donate 1% of its average monthly net assets to a selected group of charities focused on youth mental health.

Some of those charities include BackTrack, BIGhART, Happy Paws Happy Hearts, Human Naturem I CAN, Life 4 Life, Prevention United, Project Rockit, Reachout, Smiling Mind, WANTA and Youth Opportunities.

With those fees avoided, shareholder returns aren't compromised.

Great passive income

As a LIC, the board of directors have significant control over the size of the passive income that's paid to shareholders, which I think is great for retirees.

Future Generation Global has increased its payout for eight years in a row, which is a great record of growth so far.

The ASX dividend share expects to pay an annual dividend of 8.4 cents per share for 2026, which translates into a grossed-up dividend yield of 7.4%, including franking credits, at the time of writing.

That's a great starting yield for retirees, and I think the 2027 payout could be even larger.

The post Why this ASX dividend share is a retiree's dream for 2027 appeared first on The Motley Fool Australia.

The business is a listed investment company (LIC), which means it invests in other assets and shares on behalf of shareholders.

I'm going to run through what makes it such an attractive pick right now.

Excellent diversification

The business is invested in 15 different global fund managers, including Antipodes, Yarra Capital Management, Muncro, Halowesko Partners, Vinva, WCM, Cooper Investors, Life Cycl, GCQ, Ellerston Capital, Paradice, Fairlight and Morphic.

By being invested in so many fund managers, Future Generation Global is providing significant diversification. For starters it gives access to multiple investment styles, including 'long', 'absolute bias' and 'quantitative'.

Those portfolios give more exposure to medium-sized global businesses and a lot more exposure to small companies.

I also like how the Future Generation Global portfolio gives global exposure across multiple markets including North America, the UK, Europe, Asia, other developed markets and emerging markets.

I think this is a really effective pick for retirees partially because of the huge amount of diversification that it can provide our portfolios with, which retiree portfolios may not otherwise have.

But, as a pleasing bonus, Future Generation Global gives diversification and a strong level of passive income.

As a bonus, it's supporting a number of organisations include BackTrack, Big Hart, Prevention United, Project Rockit, Reach Out, Smiling Mind, Human Nature, I Can, Westerman Jilya Institute, Live 4 Life and WANTA Aboriginal Corporation.

Great dividends

There are not many businesses on the ASX that have increased their payout every year for the past eight years in a row.

There are plenty of ASX blue-chips that have cut their dividends this decade, whether that's BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), Woolworths Group Ltd (ASX: WOW), Woodside Energy Group Ltd (ASX: WDS) or Fortescue Ltd (ASX: FMG).

Future Generation Global has given investors steady growth in the dividend, which makes it an appealing choice for passive income for retirees.

The business has provided guidance that it will grow its FY26 annual dividend by 5% compared to the FY25 payout.

At the time of writing, an annual payout of 8.4 cents per share translates into a dividend yield of 5.1% excluding franking credits and 7.3% including franking credits.

When you put all those elements together, I think they can create a strong mix of positives for retiree portfolios, including the appealing philanthropy.

The post Why Future Generation Global shares are a retiree's dream for FY27 appeared first on The Motley Fool Australia.

Tax changes announced earlier this year have made non-superannuation investments less attractive – capital gains are going to be taxed more, negative gearing's appeal is being reduced, and trust distributions are under the spotlight.

With the lower tax rate during the accumulation phase and potentially a 0% tax rate in the retirement phase of superannuation (depending on the balance), it's a very effective investment vehicle for people saving towards retirement and in retirement too.

Tax makes a big difference for passive income because it's the after-tax income figure that investors can use.

Every household has a different tax position, so I'm not going to refer to tax for the rest of this article. Let's talk about dividend yields.

The power of a dividend yield

Every investment that pays dividends comes with a dividend yield.

A dividend yield tells us how much passive income an investment pays.

The dividend yield is influenced by two factors.

First, there's the dividend payout ratio – how much of a business' profit is paid out as a dividend. Obviously, the more they pay out, the bigger the dividend yield.

The other factor is the valuation of the investment, which can often be measured by the price-earnings ratio (P/E) ratio. The more expensive an investment goes, the lower the dividend yield.

Investors can then look at the different dividend yields and decide what investments to choose. Higher dividend yields aren't necessarily better, but they do mean an investor can receive more passive income for the same portfolio balance.

For example, someone with a $200,000 investment balance at a 3% dividend yield would have $6,000 in annual passive income. If that same person were invested in investments with a 5% dividend yield, it would be $10,000 of annual passive income. That's 66% more income!

Generate $10,000 of monthly passive income from superannuation

To target $10,000 per month of income, we're talking about an annual goal of $120,000. That's a big goal, and would certainly unlock a pleasing retirement for whoever is receiving that level of money.

Targeting $120,000 of annual passive income would require a sizeable portfolio. The actual size depends on the dividend yield.

If the dividend yield was 3%, it would require a portfolio worth $4 million.

If the dividend yield was 5%, it would require a portfolio worth $2.4 million.

If the dividend yield was 7%, it would require a portfolio worth $1.71 million.

If I were looking to invest for a 3% dividend yield, I'd think about ideas like Washington H. Soul Pattinson and Co Ltd (ASX: SOL), Wesfarmers Ltd (ASX: WES), Lovisa Holdings Ltd (ASX: LOV), and Vanguard Australian Shares Index ETF (ASX: VAS).

Investments with a dividend yield of around 5% that I'm a fan of include L1 Long Short Fund Ltd (ASX: LSF), APA Group (ASX: APA), and Coles Group Ltd (ASX: COL).

Finally, potential investments with a 7% dividend yield I'd consider for high dividend yields in superannuation include MFF Capital Investments Ltd (ASX: MFF), WCM Global Growth Ltd (ASX: WQG), Future Generation Global Ltd (ASX: FGG), Telstra Group Ltd (ASX: TLS), and Medibank Private Ltd (ASX: MPL).

Overall, there are some great investments to consider, and I've filled my portfolio with a mix of the above ASX shares, each with different dividend yields.

The post How much is needed in superannuation to target a $10,000 monthly passive income? appeared first on The Motley Fool Australia.

There are many names on the ASX that are providing dividends, but they're nowhere near as well-known as some stocks like Commonwealth Bank of Australia (ASX: CBA).

In my view, I'd choose the below ASX passive income shares over CBA shares every time.

Australian United Investment Company Ltd (ASX: AUI)

CBA is a high-quality bank, but it's a singular business. Owning shares in a listed investment company (LIC) means getting exposure to a compelling portfolio. Each LIC has a portfolio built around its investment strategy.

AUI is one of the most underrated LICs around, in my view. Most of its portfolio focuses on ASX blue-chip shares, though a portion of its assets is also invested in Vanguard funds that provide exposure to international shares, adding useful diversification and alternative returns.

Currently, its biggest holdings are CBA, BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO), ANZ Group Holdings Ltd (ASX: ANZ), CSL Ltd (ASX: CSL), Wesfarmers Ltd (ASX: WES), Westpac Banking Corp (ASX: WBC), Transurban Group (ASX: TCL) and Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

For the last 30 years, the LIC has either grown or maintained its regular dividend, which is an excellent record of payout consistency by the ASX passive income share.

Excluding special dividends, its current grossed-up dividend yield is 4.4%, including franking credits, at the time of writing.

It has paid a special dividend each year for the past three years of 8 cents per share. If that's included, then the grossed-up dividend yield rises to 5.4%, including franking credits.

Future Generation Global Ltd (ASX: FGG)

The other ASX passive income share I want to highlight is another LIC, except this one has a much larger focus on global shares, while AUI is focused on ASX shares.

Future Generation Global doesn't charge management fees or performance fees. Instead, it invests in the portfolios of various global-focused fund managers, who all work for free to enable the LIC to donate 1% of its net assets each to youth mental health charities. How good is that?

Some of the fund managers involved include Antipodes, Plato, WCM, Muncro, Vinva, Cooper Investors, Paradice, Morphic, Fairlight and Langdon.

For such a diverse array of managers and investment strategies, I think the portfolio has performed adequately, with an average return of 13% per year over the last three years.

The ASX passive income share has increased its annual payout every year for the past seven years in a row, which is an impressive streak. It expects to grow its annual payout to 8.4 cents per share in FY26, translating into a forward grossed-up dividend yield of 7.3%, including franking credits.

I like the combination of supporting younger people, international share diversification and good dividends.

$500 per month of passive income

Achieving an average income of $500 per month targets $6,000 annually.

Between the two stocks above, their average dividend yield is 6.35%. If we were to invest evenly between them, it'd take an investment of $94,500 to generate that income. I'd be very happy to make that investment.  

The post 2 ASX passive income share ideas I'd use to generate $500 a month in 2027 appeared first on The Motley Fool Australia.

Some Aussies may love to work, while others may want to spend more time with loved ones, travelling or whatever else they want to do.

There are a variety of appealing reasons why reaching $75,000 of annual passive income could be compelling.

Let's look at how we can unlock those targeted goals.

The power of compounding

Every investor who wants to retire early should view compounding as one of their closest financial friends.

Albert Einstein once supposedly said:

Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it.

Compounding can help us benefit from investments that are growing on their own, over multiple years. When interest earns interest, investors can see their dollars grow into a much larger figure. Those investments are growing all by themselves, rather than requiring additional funding from our own finances.

To show how positively compounding can help Australians grow wealthier, I'm going to run through two potential examples.

Imagine someone who is 20 years old right now and manages to set aside $1,000 each month to invest in ASX shares. That implies an annual investment total of $12,000. Assuming the portfolio returns an average of 10% per year – which the share market has done over the long-term – it would grow into a value of $1.18 million after 25 years.

Turning to another example, let's think about someone who starts five years later at 25. Hopefully that person would be able to earn more and save more. Let's say they can invest $1,500 per month. If the portfolio also returned an average of 10% per year, it would grow to $1.03 million after 20 years.

Which ASX shares Aussies could buy for passive income to retire

If I use the two example portfolios above, a $1.18 million portfolio would require a dividend yield of 6.3% to make $75,000 of annual passive income. Meanwhile, a $1.03 million portfolio would require a dividend yield of 7.3%.

Those are certainly high dividend yields to target for income. It may be wise to consider building up the portfolio a bit further (for even just a year or two) before retiring, as that would allow investors to target a wider variety of investments.

If I were targeting dividend yields of more than 6%, or even above 7%, I would want to acknowledge that higher yields can come with a higher risk of being reduced.

But, there are a few names I'd include.

For portfolio average dividend yield that's in the 6.3% or so range, I'd look at names like Medibank Private Ltd (ASX: MPL), PM Capital Global Opportunities Fund Ltd (ASX: PGF), Dexus Industria REIT (ASX: DXI) and MFF Capital Investments Ltd (ASX: MFF).

Some of the names I'd consider thinking of that yield at least 7% or better include Future Generation Australia Ltd (ASX: FGX), Future Generation Global Ltd (ASX: FGG), Hearts and Minds Investments Ltd (ASX: HM1), WCM Global Growth Ltd (ASX: WQG) and Charter Hall Long WALE REIT (ASX: CLW).

I believe investors seeking to retire with $75,000 in annual passive income would be well served by the above stocks, as well as other ASX shares that could deliver strong growth.

The post How much do I need to retire on $75,000 a year at 45? appeared first on The Motley Fool Australia.

As a family, we like to occasionally invest for our child's future. At some point, that money can provide for them in some way, whether that's a lump sum for a specific purpose or regular dividends to contribute towards certain things.

For multiple reasons, we decided to invest in Future Generation Global Ltd (ASX: FGG).

Diversification

Future Global Generation is a listed investment company (LIC) that's invested in the funds of more than a dozen fund managers. Some of the fund managers include Vinva, Life Cycle, Cooper Investors, Antipodes, Plato and Paradice.

That means the ASX share can provide investors like me with good diversification. The portfolio is invested in more than 3,000 underlying securities, which is amazing diversification in my view.

The portfolio is spread across a number of geographic regions, making it pleasingly diversified by market as well. Around half of the portfolio is invested in North America, approximately a fifth is invested in the UK and Europe, close to 10% is invested in Asia, approximately 5% in other developed markets, around 1% in emerging markets, and the rest is a cash position.

One of the most appealing aspects of Future Generation Global is that it donates 1% of its net assets to youth mental health charities. Some of the charities it supports include Youth Opportunities, Prevention United, Back Track, Big hArt, Happy Paws Happy Hearts and Smiling Mind.

Dividends

Future Generation Global is one of the most compelling ASX dividend shares around, in my view. It offers an attractive combination of a good dividend yield and rising payouts.

The business has steadily increased its annual payout each year since FY19. Many large ASX shares haven't delivered consistent payout growth this decade amid COVID-19 and inflation headwinds.

The business has guided its regular dividend is going to be hiked by 5% to 8.4 cents per share. That translates into a grossed-up dividend yield of 7.5%, including franking credits, at the time of writing.

Few ASX businesses have a dividend yield that high and have increased their payout for as many years in a row.

If I want to access the dividends over time, then this is a very rewarding choice.

Total shareholder returns

A key reason why I wanted to choose this ASX share with my child in mind is that it's a great choice for long-term compounding. By reinvesting the dividends, I think our Future Generation Global holding can increase in value.

The total shareholder return (TSR) measure tells investors how much of a return an investment has made when we include both the dividends and the capital growth.

Past performance is not a guarantee of future returns of course, but Future Generation Global has delivered an average TSR of 16.8% per year in the last three years and an average of 7.8% per year over the past decade.

This return is strong enough to help deliver pleasing compound growth over time.

The post The ASX share I just bought for my child appeared first on The Motley Fool Australia.

Pleasingly, superannuation has a lower tax rate than many individuals, trusts and companies. The nature of the superannuation (and how we access the money) makes it very easy to invest for the long term.

I think receiving passive income is one of the best elements of owning shares. Being paid money into our bank accounts every year for no ongoing effort sounds good to me.

One of the main benefits of superannuation is that less of the passive income return is lost to tax. I believe that the after-tax figure is what Australian investors should focus on.

If a full-time working Australian is paid passive income in their own name, they may lose a third (or more) of that dividend income to tax. That effect can make passive income seem much less appealing.

Superannuation is often the best place to invest for passive income due to the lower tax rate in the accumulation phase of life, compared to a full-time earner's individual tax rate.

However, each person's tax situation is different, so we'll just run through a particular dividend income level and not consider tax rates from now on.

How much is needed in superannuation for $60,000 of annual passive income?

Being paid $60,000 in dividends each year is appealing to me. I'm nowhere near that goal, but I'd love to reach that level of income one day.

One of the most important decisions to consider is the investments that we want to own and the dividend yield that comes with that.

I think ASX shares are the best choice for passive income, with the attached franking credits being a great bonus.

Reaching $60,000 of annual dividends depends on the size of the dividend yield and the portfolio size.

For example, if an Australian investor had investments with a 6% dividend yield, it would require a $1 million portfolio. If the portfolio had a 3% dividend yield, it would need to be a $2 million portfolio for $60,000 annual income.

As you can see, different investments provide different dividend yields. So, it depends on what Aussies want to choose.

Which ASX dividend shares I'd look at

There are a number of different investment options that investors can choose on the ASX with good dividend yields like real estate investment trusts (REITs), quality operating companies, exchange-traded funds (ETFs) and good listed investment companies (LICs).  

I think REITs are very attractive at these valuations amid high interest rates. Some of my leading ideas are Centuria Industrial REIT (ASX: CIP), Dexus Industria REIT (ASX: DXI), Rural Funds Group (ASX: RFF) and Charter Hall Long WALE REIT (ASX: CLW).

Some of the leading operating companies out there include Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Wesfarmers Ltd (ASX: WES), Lovisa Holdings Ltd (ASX: LOV), Telstra Group Ltd (ASX: TLS) and Medibank Private Ltd (ASX: MPL).

There are a few very attractive ETFs that could be useful options for dividend income such as WCM Quality Global Growth Fund (ASX: WCMQ), Vanguard Australian Shares Index ETF (ASX: VAS) and Vanguard Australian Shares High Yield ETF (ASX: VHY).

Some of the LICs that I highly rate for superannuation include MFF Capital Investments Ltd (ASX: MFF), WCM Global Growth Ltd (ASX: WQG), Future Generation Australia Ltd (ASX: FGX), Future Generation Global Ltd (ASX: FGG) and Hearts and Minds Investments Ltd (ASX: HM1).

The post How much is needed in superannuation to target a $60,000 annual passive income? appeared first on The Motley Fool Australia.

Some businesses have already provided guidance for the upcoming financial results that show a good dividend yield based on the appealing expectations.

Below are two of the higher-yielding ideas I like a lot.

Future Generation Global Ltd (ASX: FGG)

This idea is a listed investment company (LIC) which is an excellent source of passive income.

Future Generation Global aims to provide a reliable stream of income, which has regularly increased each year since FY19. For FY26, the business has provided guidance that it will increase its annual dividend per share by 5% to 8.4 cents per share.

That forecast translates into a forward grossed-up dividend yield of 7.3%, including franking credits, at the time of writing. I'm assuming no dividend growth from the ASX passive income share in FY27 for this article, but I do think there's likely to be a dividend hike in 2027.

It pays for those dividends from the investment returns of its portfolio. It's invested in a portfolio of 15 funds from fund managers focused on international shares. All of those fund managers work for free so that Future Generation Global can donate 1% of its net assets to charities focused on youth mental health.

There are more than 3,700 underlying shares across different markets and sectors, so it can offer Australians significant diversification.

Dexus Industria REIT (ASX: DXI)

This ASX passive income share is a leading real estate investment trust (REIT), in my view, due to the exposure that the portfolio provides.

It's invested in a portfolio of industrial real estate across Australian cities. It has a diversified tenant base across the sectors of wholesale trade, construction, manufacturing, retail trade, logistics and more.  

The business says that it has '3%+' embedded rental growth, with approximately 87% linked to fixed rental increases, with "strong inflation protection". This can help protect and grow rental earnings amid higher interest rates.

With a 99% occupancy rate and a five-year weighted average lease expiry (WALE), the business has strong rental characteristics that can help fund good distributions.

It expects to pay a distribution per unit of 16.6 cents, which translates into a distribution yield of close to 6.9%.

$700 per month from ASX passive income shares

Neither of these ASX passive income shares pays dividends monthly, so we're going to look at this as an annual goal, which can then be divided into monthly income. Receiving $700 per month is equivalent to $8,400 annually.

Between them, these two names have an average dividend yield of 7.1%. Receiving $8,400 per year at a dividend yield of 7.1% would require a total investment of approximately $118,300.

By investing in these two ASX passive income shares, along with other names for diversification, I think investors can build a solid level of income.

The post 2 ASX passive income ideas I'd use to generate $700 a month in 2027 appeared first on The Motley Fool Australia.

Preferably, I'd want to own investments that are likely to regularly increase the payouts to help offset inflation and hopefully grow faster than inflation.

Let's look at three businesses that have increasingly excellent track records of dividend growth.

APA Group (ASX: APA)

APA Group is one of the largest energy infrastructure businesses on the ASX. It's invested in various aspects of Australia's energy system including a huge network of gas pipelines, gas storage and processing, gas-powered energy generation, solar farms, wind farms and batteries.

It pays for its impressive distribution from the cash flow that its portfolio of energy assets produces. That cash flow is steadily rising amid additions of new energy assets over the years via acquisitions and project builds, as well as inflation-linked revenue increases.

The ASX dividend share has increased its payout every year for more than 20 years in a row, which is an excellent record of consistency.

It expects to increase its annual distribution to 59 cents per security in FY27, adding to its record. This translates into a forward distribution yield of 5.5%.  

Future Generation Global Ltd (ASX: FGG)

Future Generation Global is a listed investment company (LIC) that gives investors exposure to a portfolio of global stocks and also compelling philanthropic efforts.

It's invested in a portfolio of funds from more than a dozen fund managers focused on global shares, who all work for free. With those investments, there are more than 3,700 underlying shares in the portfolio, which is great diversification.

The shares come from across the world, including North America, the UK, Europe, Asia, other developed markets and emerging markets.

The ASX dividend share's investment returns help pay for a growing dividend, which has increased every year since FY19, so we're already at several years of consecutive payout growth.

It expects to pay an annual dividend of 8.4 cents per share in FY26, which translates into a grossed-up dividend yield of 7.4%, including franking credits.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is another leading investment business on the ASX. It's an investment house that has been listed for more than 120 years.

The beauty of its strategy is that it's invested in a variety of largely uncorrelated assets that can all generate cash flow in most economic conditions and help the company fund its market-leading dividend.

The ASX dividend share is the leader on the ASX in terms of the number of consecutive years it has increased its dividend. The regular dividend has increased every year since 1998. It's not far off 30 years of consecutive dividend growth!

With a regularly expanding portfolio of new investments – along with organic growth of existing investments – I think it's likely to continue hiking its dividend in the years ahead.

It currently has a grossed-up dividend yield of 3.4%, including franking credits, though I expect the yield for the next 12 months will include a dividend hike.

The post 3 ASX dividend shares raising dividends like clockwork appeared first on The Motley Fool Australia.

We don't necessarily need to access the passive income immediately for it to be a good investment. Australians may appreciate owning investments with stable earnings that deliver consistent payouts year to year.

Given that superannuation has a lower tax rate than individual tax rates for full-time earners, there's less of a headwind for the after-tax passive income returns compared to investments made outside of super.

There are many different passive income investments available to people who utilise self-managed superannuation funds (SMSFs). Other super funds can allow investors to invest in assets such as S&P/ASX 300 Index (ASX: XKO) shares – many businesses in that index are appealing options for income.

How to generate $2,500 of monthly passive income from superannuation

Each household has a different financial situation. There isn't a one-size-fits-all approach that I can outline that would say what everyone's net income would be. With that in mind, I'll just talk about gross income, which is before taxes and expenses.

Generating $2,500 of monthly passive income translates into $30,000 per year.

The amount you need to invest to reach that income goal depends on the dividend yield, or interest rate, of the investments.

I'll give you an example. If someone had $1 million invested with a 3% dividend yield, it would generate $30,000 of annual income.

If the dividend yield were higher, an investor wouldn't need as much invested in superannuation to create that same level of annual or monthly passive income.

For example, if an investor's portfolio had a 4% dividend yield, an investor would require $750,000.

A 5% dividend yield would mean investors require a $600,000 portfolio.

If the dividend yield was 6% then the portfolio value required would only be $500,000.

Where I'd invest for a high dividend yield

If I were looking for a high level of monthly passive income, I'd focus on businesses with a good dividend yield but also have delivered reliability.

Some of the names I'd consider would be MFF Capital Investments Ltd (ASX: MFF), WCM Global Growth Ltd (ASX: WQG), Future Generation Global Ltd (ASX: FGG), Future Generation Australia Ltd (ASX: FGX), Centuria Industrial REIT (ASX: CIP), Charter Hall Long WALE REIT (ASX: CLW), Hearts and Minds Investments Ltd (ASX: HM1), Rural Funds Group (ASX: RFF) and PM Capital Global Opportunities Fund Ltd (ASX: PGF).

But, I also wouldn't ignore investments with somewhat lower yields that have a track record of regular dividend growth as well as appealing capital growth.

The post How much is needed in superannuation to target a $2,500 monthly passive income? appeared first on The Motley Fool Australia.

For some people, retiring early sounds good because it could mean enjoying more of life, stopping before the body can't do the physical work anymore, or simply getting away from the desk.

Whatever the reason for wanting $120,000 per year of passive income, unlocking that level of dividends is enticing.

Use compounding to build wealth

One of the best things that investors can utilise to get to retirement is the power of compounding.

Albert Einstein once supposedly said about compounding:

Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it.

Compounding allows our ASX share investments to grow in value over time without us needing any more money ourselves to increase that value.

By regularly putting additional money into the stock market, investors can see the value of their portfolio increase.

I'll run through two examples of how it could work.

If someone is 25 and can invest $1,000 per month, they'd be able to invest $12,000 per year. Assuming the portfolio returns an average of 10% per year, that portfolio would grow to be worth $1.97 million after 30 years.

With the second example, let's imagine someone is 30 and has more earning power, allowing them to invest $2,000 per month. If the portfolio were to return 10% per year, it would grow to $2.36 million after 25 years.

Which ASX shares I'd buy for passive income to retire

If we go with those two examples above, a $1.97 million portfolio would require a portfolio dividend yield of approximately 6.1% to make $120,000 of annual passive income. Meanwhile, a $2.36 million portfolio would require a dividend yield of 5.1%.

I'm going to highlight some ASX shares with a lower-to-medium dividend yield and some with a higher dividend yield.

Some of the stocks with a dividend yield of around 5% (or a little less) that I like include Rural Funds Group (ASX: RFF), Centuria Industrial REIT (ASX: CIP), L1 Long Short Fund Ltd (ASX: LSF), Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), APA Group (ASX: APA), Coles Group Ltd (ASX: COL), Telstra Group Ltd (ASX: TLS) and WCM Quality Global Growth Fund (ASX: WCMQ).

The ASX shares that have a higher dividend yield that I'm a big fan of with a higher dividend yield include WCM Global Growth Ltd (ASX: WQG), MFF Capital Investments Ltd (ASX: MFF), Future Generation Australia Ltd (ASX: FGX), Future Generation Global Ltd (ASX: FGG) and Hearts and Minds Investments Ltd (ASX: HM1).

The post How much do I need to retire on $120,000 a year at 55? appeared first on The Motley Fool Australia.

What did Future Generation Global report?

• Revenue from ordinary activities fell 64.3% to $15.29 million
• Net profit after tax dropped 68.6% to $8.59 million
• Fully franked interim dividend of 4.2 cents per share declared (up from 4.0c last year)
• Net tangible assets (NTA) before tax of $1.62 per share at 30 June 2026 (down from $1.74 at Dec 2025)
• -Total shareholder return (TSR) of 16.5% for the half year, including franking credits

What else do investors need to know?

Future Generation Global's investment portfolio delivered a 2.4% return over the half, lagging the MSCI AC World Index (AUD), which returned 7.4%. The company points to a highly concentrated global share market, with much of the index growth driven by a handful of large technology and AI companies.

FGG's diversified portfolio focuses on small to mid-cap global equities and continues its social impact commitment, with $6.9 million set for donation in 2026 to youth mental health non-profits. Since inception, the company has donated $57.4 million to these causes, enabled by pro bono investment management.

What's next for Future Generation Global?

Looking ahead, FGG's board has raised the interim dividend and maintains a strong profits reserve, with around 7.9 years of dividend cover based on current reserves. The investment team believes the diversified, active fund manager approach will help navigate ongoing global market volatility.

The company will also deliver its eleventh annual donation later this year, reinforcing its commitment to social impact while seeking to grow shareholder returns.

Future Generation Global share price snapshot

Over the past 12 months, Future Generation Global shares have risen 6%, outperforming the All Ordinaries Index (ASX: XAO), which has risen 2% over the same period.

View Original Announcement

The post Future Generation Global earnings: Profit and revenue drop, dividend rises appeared first on The Motley Fool Australia.

Investing for passive income through superannuation makes sense for various reasons, with the low tax rate being a key benefit.

Keep in mind that the net income we receive from our investments is what we receive after taxes. It's possible that an Australian working full-time could lose a third of their passive income to tax, or more, depending on their tax rate.

Based on that, investing in superannuation is a more appealing prospect due to that lower tax rate.

Super has a lower tax rate in the accumulation phase compared to normal individual tax rates for a full-time earner. In retirement, the tax rate could be 0%.

Every Australian's tax position is different, so I'll just talk about targeting a certain income level, without mentioning tax any further.

How much is needed in superannuation for $5,500 of monthly passive income?

Receiving $5,500 per month of dividends translates into $66,000 annually. I'm sure most Australians would love to receive that level of dividends each year without needing to do any ongoing work for it, assuming they don't already receive that much each year.

A key question is deciding what sort of investments Australians want to own and the dividend yield attached to those stocks.

For example, a portfolio with a dividend yield of 6.6% can be half the size of a portfolio with a dividend yield of 3.3%.

For example, if a portfolio is $1 million in size with a 6.6% dividend yield, it would create $66,000 of annual passive income. If a portfolio had a dividend yield of 3.3%, the portfolio would need to be $2 million in size to make the same level of income.

If the portfolio had a dividend yield of 5%, the portfolio would need to be $1.32 million in size to generate an average of $5,500 per month of monthly passive income.

The final dividend yield we'll look at is 4%. It would take a portfolio value of $1.65 million to unlock $66,000 of annual dividends.

The sorts of ASX dividend shares I'd look at

There is a wide range of ASX dividend shares available for superannuation investments, investing in our own name or other structures.

Some of the lower-yielding stocks I'd look at are Wesfarmers Ltd (ASX: WES), Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), L1 Long Short Fund Ltd (ASX: LSF) and Lovisa Holdings Ltd (ASX: LOV).

Some of the mid-range yielding stocks I'd consider for passive income include WCM Quality Global Growth Fund (ASX: WCMQ), Telstra Group Ltd (ASX: TLS), Rural Funds Group (ASX: RFF) and Centuria Industrial REIT (ASX: CIP).

Among the higher-yielding ASX dividend shares I'd consider are WCM Global Growth Ltd (ASX: WQG), Charter Hall Long WALE REIT (ASX: CLW), Dexus Industria REIT (ASX: DXI), Future Generation Australia Ltd (ASX: FGX), Future Generation Global Ltd (ASX: FGG) and PM Capital Global Opportunities Fund Ltd (ASX: PGF).

The post How much is needed in superannuation to target a $5,500 monthly passive income? appeared first on The Motley Fool Australia.

For people already getting $40,000 per year in passive income, I reckon receiving an additional $40,000 per year would also be very welcome.

So, what would it take to unlock that river of dividends via superannuation? That's what I'll look at in this article.

Superannuation could be the best place to invest for passive income these days following taxation changes to trusts, residential property and capital gains tax.

Owning dividend-paying investments in superannuation means investors won't lose as much of the return to tax as they would if the investment was in their own name. During the accumulation phase, superannuation has a lower tax rate for income than full-time working individuals, while in retirement the tax rate for income could be 0% for many retirees, depending on the size of their superannuation balance.

With that in mind, I think superannuation is an excellent place to unlock $40,000 per year.

Generating $40,000 of annual passive income

It'll take a sizeable sum to unlock tens of thousands of dollars of dividends each year.

There's no single dollar target required because it really depends on what sorts of investments Aussies choose and the dividend yield that comes with that.

For example, if an investor had all of their money in iShares S&P 500 ETF (ASX: IVV), you'd have a dividend yield of around 1%. With a dividend yield of 1%, someone would need a $4 million portfolio to make $40,000 per year in passive income.

The IVV ETF is not the choice I'd make for passive income, though it does have other benefits.

Instead, I'd focus on building a portfolio with a dividend yield of at least 4%, if not more.

With a 4% dividend yield, an investor could generate the desired passive income from a $1 million portfolio.

If an Australian's portfolio had a 5% dividend yield, they would only need $800,000 for that income.

With a 6.5% dividend yield, an Australian's portfolio goal would be close to $615,000.

As you can see, the higher the dividend yield, the smaller the portfolio needs to be to achieve the income target.

But, higher dividend yields may be riskier and/or deliver less capital growth for investors.

So, the choices investors make could greatly influence how reliable that passive income is. Not every investment with a high dividend yield may sustain its dividends over the longer term.

ASX dividend shares I'd consider for superannuation

If Australians are willing to accept a lower dividend yield, then it's hard to look past Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). That's an investment conglomerate that owns a diversified portfolio of defensive assets, enabling it to pay a reliable and growing dividend. Its payout has grown every year since 1998, though the grossed-up dividend yield is only 3.3%, including franking credits, at the time of writing.

But, there are plenty of businesses with higher dividend yields that I think are compelling.

For example, Centuria Industrial REIT (ASX: CIP) and Dexus Industria REIT (ASX: DXI) are both real estate investment trusts (REITs) with dividend yields of between 5% and 7%. They provide exposure to industrial property, which is benefiting from compelling rental tailwinds.

I also like portfolio investments that can provide diversification and good dividend yields for superannuation investors.

Some of my favourite portfolio-based investments that come to mind include MFF Capital Investments Ltd (ASX: MFF), WCM Quality Global Growth Fund (ASX: WCMQ), WCM Global Growth Ltd (ASX: WQG), Future Generation Australia Ltd (ASX: FGX), Future Generation Global Ltd (ASX: FGG) and L1 Long Short Fund Ltd (ASX: LSF). All of these names have a track record of increasing payouts to shareholders, with dividend yields between 4% and 7%.

There are a number of other attractive ASX shares to consider, in my view, for passive income.

The post How much is needed in superannuation to target a $40,000 annual passive income? appeared first on The Motley Fool Australia.

Australians have a variety of investment options for generating income in retirement. Bonds, term deposits, dividend shares and property are all options for passive income.

I think shares are best placed to provide good passive income because they can offer both a good dividend yield and rising payouts driven by profit growth.

Term deposits and bonds offer a fixed return, while the net rental yields from residential property are not particularly appealing to me.

So, let's explore using ASX shares to generate the six-figure annual sum.

Retire on $100,000 of income at 60

Every household has different spending requirements and retirement goals, but $100,000 would be a pleasing level of investment income for most households.

If we invest well, someone could start their retirement with $100,000 of income, and those payouts could steadily grow over time.

Investors wanting $100,000 per year will need a sizeable portfolio, with the exact amount depending on the investment portfolio's dividend yield.

If an investor had assets that had an average dividend yield of 5%, they would need a portfolio size of $2 million. If someone wanted to retire on $100,000 per year and they had $1.5 million, we'd be talking about a dividend yield of approximately 6.66%.

Investors may be wondering what sorts of investments could deliver that sort of dividend yield.

Passive dividend income ideas

Many Aussie investors are probably aware of, and perhaps invested in, Vanguard's most popular option, which focuses on ASX shares: Vanguard Australian Shares Index ETF (ASX: VAS). This ASX ETF gives exposure to 300 of the largest businesses on the ASX.

For investors specifically targeting passive income, Vanguard Australian Shares High Yield ETF (ASX: VHY) focuses on larger high-yielding ASX shares.

Other popular options for passive dividend income include Australian Foundation Investment Co Ltd (ASX: AFI) and Argo Investments Ltd (ASX: ARG), two of the largest and oldest listed investment companies (LICs).

The benefit of the four options I mentioned above is that they offer fairly diversified portfolios, with significant exposure to stable, ASX blue-chip shares and sizeable dividend yields.

I think they're all solid options to consider for dividend yields of around 5%. I'd also highlight a couple of real estate investment trusts (REITs), such as Rural Funds Group (ASX: RFF) and Centuria Industrial REIT (ASX: CIP), that have reliable payout records, organic revenue growth, distribution yields of just over 5% and trade at appealing prices.  

But, there are a few stocks that I believe could be compelling options to buy for a dividend yield of approximately 6.7%, while also providing payout consistency (and potentially growth).

Some of the ideas that come to mind include the LICs Future Generation Australia Ltd (ASX: FGX), Future Generation Global Ltd (ASX: FGG) and WCM Global Growth Ltd (ASX: WQG), as well as the REITs Charter Hall Long WALE REIT (ASX: CLW) and Dexus Industria REIT (ASX: DXI).

Some operating Australian companies, such as Telstra Group Ltd (ASX: TLS), are also options to consider for passive income.

The post How much do I need to retire on $100,000 a year at 60? appeared first on The Motley Fool Australia.

Dividend income is an excellent aspect of owning ASX shares, but tax is an obvious headwind for the return.

An Australian investor working full-time could lose a third (or more) of their passive income return to tax if they own those shares directly. Recently announced tax changes may also mean that investing in shares through trusts is not as compelling.

Therefore, superannuation could be the best place to invest for passive income and unlock significant cash flow.

Each household's taxation position is different, so I'm not going to mention tax again for the rest of this article.

How to make $2,000 of monthly passive income

Generating $2,000 per month, which equates to $24,000 per year, may not be enough to live an extravagant lifestyle. But, it could be a significant addition to other forms of income, such as interest or rental profits.

How large a portfolio needs to be to make $24,000 per year largely comes down to what the portfolio's average dividend yield is.

The higher the dividend yield, the smaller the portfolio can be to generate the same level of dividend income.

However, not all dividend yields are necessarily as reliable as others. I'd rather invest in a business that's likely to keep paying dividends than go for a huge dividend yield and see the payments disappear during an economic downturn.

If a portfolio had a dividend yield of 4%, the portfolio would need to be $600,000 in size to generate $24,000 of annual passive income.

A portfolio with a 5% dividend yield would require the portfolio to be $480,000 in size.

If the portfolio had a dividend yield of 6%, it would only need to be $400,000 in size.

What sorts of ASX shares I'd buy

There is a wide range of investment choices available for investors to choose from for passive income in superannuation.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) is a very compelling idea for income because its annual dividend has been hiked every year since 1998. However, its grossed-up dividend yield (including franking credits) is currently less than 4%.

In my view, many retiree investors could benefit from considering compelling listed investment companies (LICs) because their portfolios can provide diversification, and dividends can be smoothed for consistent payouts.

I think some of the leading LICs for passive income include WCM Global Growth Ltd (ASX: WQG), MFF Capital Investments Ltd (ASX: MFF), L1 Long Short Fund Ltd (ASX: LSF), WAM Microcap Ltd (ASX: WMI), WAM Leaders Ltd (ASX: WLE), Future Generation Australia Ltd (ASX: FGX) and Future Generation Global Ltd (ASX: FGG).

A few quality real estate investment trusts (REITs) also look significantly undervalued to me, such as Centuria Industrial REIT (ASX: CIP), Dexus Industria REIT (ASX: DXI), Charter Hall Long WALE REIT (ASX: CLW) and Rural Funds Group (ASX: RFF).

The above ASX shares, among others, are top ideas for passive income in superannuation (or outside it).

The post How much is needed in superannuation to target a $2,000 monthly passive income? appeared first on The Motley Fool Australia.

The tax rate of investment earnings for individuals, trusts and companies may be higher than the tax rate of investment returns inside superannuation.

Another bonus of the super set-up is that, in most cases, we won't access the money for many years, promoting the idea of long-term investing inside superannuation. Investing for the long-term gives us the best chance that an investment will play out positively.

I'd say that receiving passive income is one of the best elements of owning shares. It requires virtually no additional effort to receive money into our bank account once we hold that investment.

Why is superannuation important for passive income? Less tax in super means losing less of the passive income return to tax.

Outside of super, a full-time working Australian could lose a third (or more) of the passive income return to tax, which makes that type of return less appealing.

Superannuation looks significantly more appealing, in my view, given how much lower the tax rate is during the asset accumulation phase of life when compared to a full-time individual's tax rate.

It could get even better in retirement, where a person's superannuation tax rate may be 0%. You can't get a tax rate lower than that!

Of course, every Australian's tax position is different, so we'll just look at the particular income goal from here and ignore the tax rates.

How much is needed in superannuation for $90,000 of annual passive income?

Being paid $90,000 in dividends each year sounds amazing to me. I'm a very long way from that goal, but I would like to reach that annual dividend target eventually.

Australians need to think about what sorts of investments they want to own and the dividend yield those investments provide.

I believe ASX shares are the best pick for passive income. That's partly because the franking credits attached to dividends from Australian companies are an excellent addition to the return.

What's actually required to earn $90,000 annually depends on the dividend yield of the portfolio.

For example, a portfolio with a 5% dividend yield would need to be $1.8 million in size, while a dividend yield of 7% would need to be $1.29 million in size.

The required portfolio size varies significantly in size, so it depends on the sorts of investments we make in our portfolio.

The types of ASX dividend shares I'd buy

There are a number of high-quality ASX dividend shares that Aussies can buy for yield, such as quality operating companies, listed investment companies (LICs) or real estate investment trusts (REITs).

In my view, Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) may be the strongest choice for reliable and rising dividends, but it has a relatively low dividend yield.

Some of the businesses I like with a dividend yield around 5% includes Telstra Group Ltd (ASX: TLS), APA Group (ASX: APA), Rural Funds Group (ASX: RFF), Centuria Industrial REIT (ASX: CIP), MFF Capital Investments Ltd (ASX: MFF) and L1 Long Short Fund Ltd (ASX: LSF).

My favourite ideas with an expected dividend yield of around 7% (or more) include WCM Global Growth Ltd (ASX: WQG), Future Generation Australia Ltd (ASX: FGX), Future Generation Global Ltd (ASX: FGG), Charter Hall Long WALE REIT (ASX: CLW), Dexus Industria REIT (ASX: DXI), WAM Microcap Ltd (ASX: WMI), WAM Leaders Ltd (ASX: WLE) and Hearts and Minds Investments Ltd (ASX: HM1).

These aren't the only compelling ASX dividend shares for superannuation investors to consider, but I think they're a great place to start.

The post How much is needed in superannuation to target a $90,000 annual passive income? appeared first on The Motley Fool Australia.

If I were to try to narrow it down, I'd choose ones that have a good starting dividend yield, reliable payouts and a high chance of long-term dividend growth.

With that in mind, I'd suggest the following two stocks fit the bill if I wanted to unlock significant passive income.

Centuria Industrial REIT (ASX: CIP)

The first business I want to highlight is this real estate investment trust (REIT). It is one of the best ways to get exposure to industrial property on the ASX.

Centuria Industrial REIT's properties are predominantly situated in well-located areas of Australian cities where demand is high due to logistics requirements, e-commerce adoption, data centres, and refrigerated space. This helps the business achieve a high occupancy rate and helps grow rental earnings.

The ASX passive income stock's rental income growth potential is particularly strong, with the REIT suggesting its portfolio is 20% 'under-rented'. This suggests a big jump in rental profit is likely to occur as those contracts come up for renewal over the next few years.

The business pays a distribution to investors every quarter, providing a pleasing level of consistency and supporting cash flow.

In FY26, the business grew its distribution by around 3% to 16.8 cents per security, which currently translates into a distribution yield of 5.6%. I expect a similar payout in FY27.

It looks like a great time to buy, especially given that the ASX passive income stock is currently trading at a 24% discount to its net tangible assets (NTA) of $3.95 as of 31 December 2025.

Future Generation Global Ltd (ASX: FGG)

Future Generation Global is the other idea I want to talk about as an idea for dividends.

It's a listed investment company (LIC) with a difference: it's invested in the funds of more than a dozen fund managers who all work pro bono (for free) to enable Future Generation Global to donate 1% of its net assets each year to youth mental health charities.

Not having management fees or performance fees can significantly improve the net returns of an LIC. Some of the fund managers involved include Antipodes, Vinva, Plato, Langdon and WCM.

Overall, there are more than 3,700 underlying securities in the portfolio with these funds, across different sectors, so there's plenty of diversification.

It has delivered solid investment performance – for example, in the past three years the portfolio has returned an average of 14% per year.

This pleasing investment performance has allowed the business to increase its dividend each year for the last seven years, starting in FY18. It expects to pay an annual dividend per share of 8.4 cents in FY26. That's a grossed-up dividend yield of around 7%, including franking credits.

$400 per month of passive income

Between my two above ideas, they have an average dividend yield of 6.3%, including franking credits.

To generate an average of $400 per month, we're talking about an annual goal of $4,800. With a dividend yield of 6.3%, an investor would need to invest around $76,200 across these businesses.

I'd be very happy to make that investment because of their track records of paying pleasing dividends, though they're not the only ASX stocks I'd buy for passive income.

The post 2 ASX passive income ideas I'd use to generate $400 a month in 2027 appeared first on The Motley Fool Australia.

Once the tax changes kick in, superannuation may have a lower tax rate than what many individuals, trusts and companies experience.

Another benefit of superannuation is how effective it is for long-term investing. That's because we're typically not going to access that money for a very long time.

I love investing for passive income by owning shares. My money is working in the share market for me year-round and unlocking cash payments to my bank account.

Superannuation is important for this endeavour because of how we lose less of the income return to tax.

If a full-time working Australian receives passive income in their own name, they're likely to lose a third (or more) of the passive income to tax, significantly reducing the appeal of the passive income return.

In my view, superannuation can be the most appealing place to invest because of the better tax rate in the accumulation phase of life, compared to an individual's tax rate if they work full-time.

Impressively, an Australian's superannuation tax rate could be 0% in retirement, which is as good as it gets. 

Each Australian's tax rate is different, so I'll focus on targeting a specific income goal from here on, ignoring tax rates.  

How much is needed in superannuation for $80,000 of annual passive income?

Receiving $80,000 in dividends each year sounds good to me, although I'm certainly a long way from that goal. I hope I can reach that target in the future.

I think it's a wise idea for investors to think about what sorts of investments they want to own and the attached dividend yield that comes with that.

There are many different options for investors to consider, but I view ASX shares as the clear leader because of the appealing dividend yields and the fact that company payouts can come with franking credits.

The required portfolio size to reach $80,000 annually depends on the portfolio's dividend yield.

For example, if the portfolio had a 5% dividend yield, it would need to be $1.6 million in size. A 4% dividend yield would require a $2 million portfolio, and a 7% dividend yield would require a $1.15 million portfolio.

Every dividend yield requires a different portfolio size to reach the desired target. As a result, the ASX shares we choose play an essential part in the portfolio's dividend yield. 

Which ASX dividend shares I'd buy

Pleasingly, there are a number of ASX shares that can provide good dividend yields to retiree investors (and anyone else).

There are compelling companies, quality real estate investment trusts (REITs) and compelling listed investment companies (LICs).

Some of the businesses I like include Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Telstra Group Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES), Lovisa Holdings Ltd (ASX: LOV), Propel Funeral Partners Ltd (ASX: PFP) and Universal Store Holdings Ltd (ASX: UNI).

Some of the fund-based investments that pay attractive dividends include MFF Capital Investments Ltd (ASX: MFF), WCM Quality Global Growth Fund (ASX: WCMQ), Future Generation Global Ltd (ASX: FGG) and Future Generation Australia Ltd (ASX: FGX).

In terms of property investments, I think some of the undervalued names with useful organic rental income growth are Rural Funds Group (ASX: RFF), Dexus Industria REIT (ASX: DXI), Centuria Industrial REIT (ASX: CIP) and Charter Hall Long WALE REIT (ASX: CLW).

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