An ideal retirement investment should have three characteristics. It should offer a decent dividend yield. The dividend should be safe and reliable. And to protect against the ravages of inflation in your retirement years, the income stream should rise over time.
Surprisingly, most “income” investments fail at least one of these criteria. Bonds offer a safe yield, but in this rate environment it is not a particularly attractive one. And the payout certainly doesn’t rise over time. Mortgage REITs often pay out very attractive dividend yield, but the payout is rarely consistent, and mortgage REITs routinely cut their dividends when the yield curve flattens.
What about dividend-paying stocks? There are plenty of dividend-paying stocks that meet our criteria — and Macro Trend Investor’s Core Dividend Portfolio is chock full of them — but as a general rule, the higher and more enticing the dividend yield, the highly the likelihood that the dividend will be cut.
For the best combination of high dividend yield, safety, and inflation-beating dividend growth, your best bet is the equity REIT sector. And today, I’m going to give you five of my favorite retirement REITs.