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 3.9%, the Australian share market offers income investors far better potential returns than savings accounts and term deposits put together.
Three shares that I believe would be suitable for retirees in search of income are listed below:
Australia and New Zealand Banking Group (ASX: ANZ)
With this banking giant's shares currently offering investors a trailing fully franked 6% dividend, I would much rather have my money invested in its shares than sitting in one of its high interest savings accounts. Especially as I believe the bank will be in a position to increase its dividend in FY 2019 thanks to cost saving opportunities, out of cycle rate hikes, and its exposure to a solid performing business lending market.
National Storage REIT (ASX: NSR)
Although this self-storage-focused real estate investment trust's units have just risen to a 52-week high, they still provide investors with a 5% distribution yield. I believe this distribution could increase at a solid rate over the coming years thanks to growing demand for its existing 127 storage centres across Australia and New Zealand. In addition to this, the trust has a sizeable cash balance to fuel its growth through acquisitions and developments. At its last update management revealed it was actively considering $100 million worth of acquisitions.
Wesfarmers Ltd (ASX: WES)
Another option for retirees to consider is this conglomerate which provides a generous estimated 5.7% dividend yield. As well as providing income, I think Wesfarmers' shares could climb notably higher over the coming years following the restructure of its portfolio last year. I feel this made Wesfarmers a stronger company and put it in a position to accelerate its growth through earnings accretive acquisitions. This could make it one of the better blue chips for retirees to consider buying this month.
