Spoiler alert: I am quite a few decades away from retirement age. But I’m still thinking about the ASX dividend income shares I plan on using to fund my golden years. Choosing the right income shares can be a challenging task, especially when you consider that other sources of income tend to dry up when you are no longer working.
So here are three that I can see being better than ever and paying out dividends to their investors for the rest of my lifetime.
3 ASX income shares I plan on funding my retirement with
National Australia Bank Ltd (ASX: NAB)
Of course, we had to have an ASX 200 bank share. My pick of the bunch is NAB. Thanks to Australia’s four-pillar banking system, I fully expect NAB to be here for the long haul. And if the Australian economy keeps growing over the coming decades (which is probably a good bet if history is anything to go by), NAB’s earnings, and dividends, should follow suit.
NAB is one of the best-run ASX banks in my view. What’s more, its recent share price decline has pushed the NAB dividend yield to over 6.3%, which naturally comes fully franked too. If that’s the yield on cost we can get today, I’m salivating at the thought of what it could be in a decade or two’s time.
MFF Capital Investments Ltd (ASX: MFF)
MFF Capital is probably a company you haven’t heard of. It’s a listed investment company (LIC) run by one of the co-founders of Magellan Financial Group Ltd (ASX: MFG), the Warren Buffett-inspired Chris Mackay. MFF is a quiet but steady achiever. It has grown healthy over the past decade thanks to its strategy of investing in quality US companies. Some of its long-term holdings include the likes of Amazon, Alphabet, Visa and American Express.
MFF has been growing its fully-franked dividends at a steady pace in recent years. 2018 saw investors receive a total of 3 cents per share in dividends, but by 2022, this had risen to 7.5 cents per share. 2023’s interim dividend continues this trajectory, coming at 3.4 cents per share against last year’s commensurate payment of 3.5 cents. I see no reason why this dividend won’t continue to rise over the coming years.
Washington H. Soul Pattinson and Co Ltd (ASX: SOL)
Perhaps I’ve saved the best for last with Soul Patts. Washington Soul Pattinson is ASX dividend royalty. It is the only share on the stock market that has delivered an annual dividend pay rise every single year since 2000. That’s through the global financial crisis, as well as the COVID pandemic. No other share can boast such an impressive record.
Soul Patts is an incredibly diverse company. It owns large portfolios of other ASX shares, as well as growing investments in private equity, private credit and property. This company has been around since the 19th century and has an impeccable record of delivering for its investors for the entirety of this history.
As we looked at last month, an investment back in 2000 would see an investor reap more than a 20% yield on cost today. As such, I have full confidence that Soul Patts shares will form the foundation of my retirement.
