With rates going nowhere for some time, if I were a retiree I would look to the share market for a source of income.
After all, with an average dividend yield of approximately 4%, the share market offers income investors far better potential returns than savings accounts and term deposits.
Three shares which I think would be suitable for retirees in search of income are listed below:
Dicker Data Ltd (ASX: DDR)
Dicker Data is a robust, founder-led business with directors that have plenty of skin in the game. But importantly for income investors it plans to pay shareholders a generous fully franked dividend of 18 cents per share in FY 2018, which equates to a dividend yield of 6.1% based on its current share price. Another bonus for investors in search of regular income is that it pays this dividend out in quarterly instalments.
National Storage REIT (ASX: NSR)
This storage giant is another robust business rewarding its shareholders with a generous dividend. In FY 2018 the company paid a total annual distribution of 9.6 cents per share to its shareholders, which is the equivalent of a 5.6% yield based on its current share price. Pleasingly, I believe this distribution could grow meaningfully over the next few years as it pushes ahead with its store expansion and redevelopments.
WAM Capital Limited (ASX: WAM)
This listed investment company pays one of the more generous dividends on the local share market. Based on their last traded price, WAM Capital's shares currently offer income investors a trailing fully franked 6.4% dividend. Considering its track record of dividend increases (this year will be nine years in a row of increases) I expect there's a good chance this dividend could increase further in FY 2019. Especially given the strong performance of its funds from some quality stock picking.
