When you're young and first start investing you might focus on growth shares that offer potentially strong returns like Nearmap Ltd (ASX: NEA). After all, if things don't go to plan, you have plenty of time to recover your losses.
But as you near retirement I believe it would be prudent to put these types of investments on the backburner in favour of those that offer income and capital preservation.
Three shares which I think are perfect for a retirement portfolio right now are as follows:
Coles Group Ltd (ASX: COL)
This supermarket giant could be a good option for a retirement portfolio due to its defensive qualities, solid growth prospects, strong market position, and favourable dividend policy. Coles intends to pay out between 80% and 90% of its earnings to shareholders. Based on this, I estimate that its shares currently offer investors a fully franked forward 4% dividend.
Lendlease Group (ASX: LLC)
This international property and infrastructure company may have had a mixed year, but things are looking significantly better now thanks to a recent agreement with Google. Lendlease will develop the tech giant's landholdings in San Jose, Sunnyvale and Mountain View into mixed-use communities. This $20 billion project is expected to be a big boost to its earnings and dividend growth over the next decade. I estimate that its shares will offer a fully franked 4.7% dividend yield in FY 2020.
Rural Funds Group (ASX: RFF)
Another top option for retirees could be this agriculture-focused property group. This is because of the quality of its assets and its positive long-term distribution outlook. Thanks to its long-term tenancy agreements and periodic rent increases, I believe Rural Funds will be able to grow its distribution at a solid rate long into the future. An added bonus is that it pays its distribution in quarterly instalments, providing investors with a regular source of income. The company's units offer investors a 4.5% forward distribution yield at present.
