Are you currently retired or approaching retirement soon? Or, perhaps you're looking for an additional revenue stream?
The S&P/ASX 200 Index (INDEXASX: XJO) fell heavily this past week, which makes investors very nervous and it can all seem very scary. However, this can actually provide astute investors with a good opportunity to buy some high-quality companies at more favorable share prices.
In my view, ASX shares that pay high dividend streams are a much better investment strategy than keeping your money in a savings account or term deposit, where the interest you earn often doesn't even cover inflation.
In addition to this, shares have the advantage of providing you with long-term capital gains, provided that you have a long-term investment horizon.
So, with that being said, here are 2 ASX dividend shares to help you set up an income stream in retirement.
Wesfarmers Ltd (ASX: WES)
Wesfarmers has grown from its origins in 1914 to become one of the top 10 largest ASX shares by market capitalisation. One of Wesfarmers' core strengths is its proven track record in investing in lucrative new areas across a wide range of market segments.
Up until the demerger of Coles in 2018, Wesfarmers was Australia's largest listed company by revenue. Although Wesfarmers retained around 15% of Coles Group Ltd (ASX: COL) shares, it recently announced the sale of 4.9% issued capital of Coles. This sale had a market value of around $1.1 billion at the time of the announcement and brings Wesfarmers' stake down to 10.1%.
Purchasing Wesfarmers shares gives instant access to a diverse portfolio of high-quality companies, driven by a quality and experienced management team. Wesfarmers also pays an attractive dividend yield of 3.7% that is fully franked (which grosses up to 5.3%).
Telstra Corporation Ltd (ASX: TLS)
For several decades, Telstra was the undisputed king of the Australian telco market. However, this has all changed because of the rollout of the National Broadband Network (NBN). No longer did Telstra own the national network.
Telstra has been undergoing significant short-term pain as it restructures strategy into a leaner company in order to retain its dominant number 1 market position. Telstra recently reported it is well on its way to achieving this goal.
Additionally, Telstra is also a world leader in the rollout of 5G service. 5G has the potential to offer even faster broadband speeds than the NBN, providing Telstra with a real opportunity to gain new mobile broadband subscribers from dissatisfied NBN customers. Telstra shares currently trade on a fully franked trailing dividend yield of 2.9%. This jumps up to a yield of 4.67% when including special dividends, which then turns into 6.67% grossed-up.
Foolish takeaway
Both of these two shares should not only provide you with a generous stream of income into the future, but are also likely to provide you with capital growth over the long-term.