Dividend income is important to most ASX investors, even those who don’t actively look for dividend stocks. After all, our share market is a relatively high-yielding one by international standards, and most ASX stocks that are profitable divert at least some of those profits to shareholders as soon as they can afford to. However, securing a reliable stream of passive dividend income that will last decades is even more important for retirees, and those who want to retire in the near future.
Why? The answer is obvious: Retirees have no primary source of income to fill in the gaps if there are any hiccups with their portfolio’s income stream. They only get one shot at building a portfolio of reliable income providers. Miss that shot, and you miss your paycheque.
That’s why selecting the right shares is absolutely vital. Luckily for any investors who find themselves in that camp, I think there are characteristics we can look out for in a retirement share that indicate whether it will be a suitable candidate for providing income that one can live off.
Let’s examine these characteristics by going through five ASX dividend stocks that I think have what it takes to pay you for life.
5 ASX dividend stocks that can pay you for life
National Australia Bank Ltd (ASX: NAB)
The ASX banks are well-known for providing fat, franked dividends, and NAB is no different. It has funded generous shareholder payouts for decades, almost all of which have come with full franking credits attached. But does this bank and dividend stock have what it takes to pay you for life?
Well, I think that it does. NAB is one of the big four banks, forming an essential pillar of the Australian financial system. It comfortably inhabits that cozy oligopoly, with a rusted-on customer base, healthy profitability, and a sound loan book. It has been around and paying dividends for decades, and should be for decades to come.
Like all banks, NAB’s fortunes do tend to rise and fall alongside the broader Australian economy. Saying that, I think this bank will have the capacity, whenever the economic signs are clear, at least, to fund generous, franked dividends for the foreseeable future.
Next up, we have the largest public company in Australia to discuss. BHP is Australia’s largest miner, and one of the most prominent mining companies in the world. Normally, I prefer not to include resources or energy stocks in a portfolio, at least in meaningful allocations, due to the volatile nature of the commodities business. Even dividend stocks that irregulalry deliver massive payouts.
However, I think BHP is worthy of an exception. For one, its profits don’t rise or die on just one metal. BHP has significant operations in a range of vital commodities. There’s its flagship iron ore, of course. But also potash, metallurgical coal and copper. Copper in particular is exciting and future-facing. BHP has been expanding its operations in the red metal, which is an essential ingredient in electric vehicles, batteries, solar panels, data centres, and much more.
Thanks to this company’s size and scale, BHP should be able to supply massive amounts of these essential commodities for decades to come. Shareholders stand to benefit, particularly when prices are high, and BHP turns on its famous dividend spigots.
MFF Capital Investments Ltd (ASX: MFF)
Turning to a lesser-known ASX dividend stock now, let’s talk about MFF Capital. MFF is a listed investment company (LIC). This means it owns and manages its own portfolio of underlying investments on behalf of its shareholders. In MFF’s case, this portfolio is almost entirely made up of top US dividend stocks. These include the likes of Alphabet, Visa, Mastercard, American Express, and more.
MFF has been investing in the US for many years, and has shown that it can deliver market-beating returns for its ASX investors. It has one of the best dividend growth streaks on the ASX, with its annual payouts rising from 6.5 cents per share in 2021 to 21 cents per share in 2026 (that’s with an annual hike every year along the way). It also attaches full franking credits to these payouts.
I’d be happy to spruik this income powerhouse as a cornerstone of an early retirement portfolio.
Coles Group Ltd (ASX: COL)
Returning to a well-known ASX blue chip dividend stock, Coles is another prime candidate for a retirement portfolio. Coles is a stock known and perhaps loved by most Australians. It boasts the second-largest supermarket chain in the country, alongside its Liquorland chain of bottle shops.
Coles boasts a profitable and mature business, which is a great start. But its true strength comes from its nature as a consumer staples share. As a purveyor of food and household essentials, Coles sells goods that we tend to need to buy. That’s regardless of the state of the broader economy. This gives Coles a highly defensive earnings base from which it can pay its dividends. Since listing on the ASX in its own right back in late 2018, Coles has managed to hike its annual dividends every single year. It also tends to pay full franking credits too.
As long as Coles is one of the cheapest places to purchase food and household essentials, it should be a fantastic investment to own if you wish to fund an early retirement.
Washington H. Soul Pattinson and Co Ltd (ASX: SOL)
Last, but certainly not least, we have investing house Washington H. Soul Pattinson, or Soul Patts for short. Soul Patts is an interesting and quite unique ASX dividend stock. Similarly to MFF, it invests in an underlying portfolio of investments for its shareholders. This portfolio is hugely diversified. It ranges from stakes in other ASX blue chips to venture capital, property, private credit and more.
Now, that in itself is not a reason to invest in this dividend stock. However, Soul Patts has been around for more than a century. Over that long time span, it has consistently generated market-beating returns for its investors. This includes what is the ASX’s best dividend track record, bar none.
This company has increased its annual dividend every single year since 1998, including in 2026. That’s through the dot-com bust, the global financial crisis, and the COVID-19 pandemic. The rate of these increases has far outstripped inflation too. Just to put a cherry on this cake, those dividends almost always come fully franked.
With this inherent diversity and indomitable track record, I think this ASX dividend stock would be the crown jewel in any retirement portfolio, or any ASX share portfolio, for an investor who wants financial success and freedom for the rest of the 2020s, the 2030s, and beyond.
The post Plan on retiring early? I've found 5 dividend stocks that have what it takes to pay you for life appeared first on The Motley Fool Australia.
Wondering where to invest $1,000 right now?
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes could be the ‘five best ASX stocks’ for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…
See the 5 Stocks
* Returns as of 6 March 2025
More reading
American Express is an advertising partner of Motley Fool Money. Motley Fool contributor Sebastian Bowen has positions in Alphabet, American Express, Mff Capital Investments, Visa, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, American Express, Visa, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Mff Capital Investments and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Alphabet, BHP Group, and Visa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
