One of the best ways to set yourself up for an early retirement is by having a passive income stream that is reliable and has the potential to grow over time.
I think dividend shares are one of the best investments in this case and are especially useful in retirement thanks to the benefit of franking credits.
Fortunately, the ASX offers a number of reliable dividend shares that investors can consider as part of a diversified investment portfolio, including:
Amcor Limited (ASX: AMC)
Amcor is not the most exciting share in the world but the packaging company is a dependable performer with some very strong defensive qualities. The company is leveraged to the recovery of the U.S. economy and also provides Australian investors with some international earnings exposure. I would prefer to buy the shares at a slightly lower valuation, but they still currently offer a decent dividend yield of around 3.8%.
Retail Food Group Limited (ASX: RFG)
Retail Food Group has an impressive track record when it comes to boosting its dividend and I believe investors can expect further dividend increases over the next few years. The shares have hit a rough patch recently over concerns relating to its franchisees and employee entitlements but I think these concerns have been blown out of proportion. The company remains on track to deliver double-digit earnings growth this year and offers a very attractive dividend yield of 5.2%.
Macquarie Group Ltd (ASX: MQG)
The Macquarie Group share price has performed strongly over the past 12 months, but I still think it offers the best upside potential of all the large-cap financial shares on the ASX. The group generates a significant proportion of its revenue from recurring sources and this gives it a much more reliable and lower-risk earnings profile. Local investors can expect a nice boost to earnings if the Australian dollar falls from here and pick up a juicy dividend yield of 4.8% along the way.
