Superannuation is a fantastic tool to help build wealth to live off in retirement. And an $800,000 balance will provide enough money to live comfortably when the time comes.

But you don’t have to let it sit idly in the meantime.

Instead, you can invest your superannuation balance and generate a regular source of passive income for when you’ve stopped working.

But exactly how much passive income could a $800,000 superannuation balance generate each year?

Let’s investigate.

How much passive income can I generate from an $800,000 superannuation balance?

To calculate the potential passive income from an $800,000 superannuation balance, you need to multiply your total balance by the dividend yield of your portfolio.

It’s a simple calculation, but the problem is that the answer varies depending on the yield of the stocks you pick.

For example, a 3% yielding portfolio needs to be twice the size of one that yields 6% to earn the same passive income.

Which also means that as your dividend yield increases, the passive income you can earn from your $8000,000 superannuation balance climbs higher. 

Here’s a breakdown by yield. These figures are based on cash dividends before tax or franking credits. 

What can I earn from a 3% to 4% yielding portfolio?

If your superannuation portfolio has a dividend yield of around 3%, your passive income will be around $24,000 per year, because $800,000 x 3% = $24,000.

If your portfolio yields closer to 4%, your passive income could be closer to $32,000 every year ($800,000 x 4% = $32,000).

Major miners like BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO) yield around this level. As do banking giant Commonwealth Bank of Australia (ASX: CBA) and conglomerate Wesfarmers Ltd (ASX: WES).

What passive income can I earn if my superannuation portfolio yields 5% or 6%?

If your superannuation portfolio yields closer to 5%, you could earn $40,000 every year in dividend payments off the same superannuation balance ($800,000 x 5% = $40,000).

At a 6% yield, you could earn an annual passive income closer to $48,000.

Classic dividend stocks like APA Group (ASX: APA), Transurban Group (ASX: TCL), and JB Hi-Fi Ltd (ASX: JBH) all pay around this level.

What about a portfolio yielding much higher, around 7% or 8%?

But if your portfolio has a slightly higher dividend yield of around 7% or 8%, your passive income will go up again to around $56,000 or $64,000, respectively.

Again, it’s possible to buy shares around this level, but there are fewer options.

Solvar Ltd (ASX: SVR), Waypoint REIT Ltd (ASX: WPR), and HomeCo Daily Needs REIT (ASX: HDN) all pay around this yield at the time of writing.

Is it possible to invest in ASX shares yielding 10% or higher?

It’s possible, but generally, the higher the yield, the higher the volatility and risk associated with the stock. 

If high yield and high risk are what you’re after, at a 10% yield, a $800,000 balance could earn around $80,000.

You could invest in ASX-listed stocks such as Tower Ltd (ASX: TWR) or Kina Securities Ltd (ASX: KSL). Another option is to invest your superannuation in a high-yielding exchange-traded fund (ETF), such as the VanEck MSCI International Value ETF (ASX: VLUE) or the VanEck Gold Miners ETF (ASX: GDX). These all yield 10% or more at the time of writing.

The post How much passive income can I earn off an $800,000 superannuation balance? appeared first on The Motley Fool Australia.

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• BHP Group vs Rio Tinto shares: Which pays better dividends?
• Up 52% and paying dividends: Are BHP shares a buy, hold, or sell today?

Motley Fool contributor Samantha Menzies has positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group and Wesfarmers. The Motley Fool Australia has positions in and has recommended Apa Group and Transurban Group. The Motley Fool Australia has recommended BHP Group, HomeCo Daily Needs REIT, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Passive income is one of the reasons many investors turn to the ASX.

But rather than simply chasing the highest dividend yields available today, I would recommend investors own businesses that can grow over time.

With that in mind, these four ASX passive income shares would be on my long-term shortlist.

Flight Centre Travel Group Ltd (ASX: FLT)

Flight Centre may not be the first company that comes to mind for passive income, but I think it has an interesting long-term case.

The travel company has rebuilt strongly since the pandemic and once again has the capacity to return cash to shareholders.

I especially like its exposure to both leisure and corporate travel. Those businesses give Flight Centre several ways to benefit as travel spending grows over time.

The dividend will probably be more cyclical than those of some defensive companies, particularly if economic conditions weaken.

But I think there is room for earnings and dividends to grow as the business becomes larger and more profitable. For investors willing to accept some volatility, I would be happy to own Flight Centre for income and growth.

Coles Group Ltd (ASX: COL)

Coles is a much more defensive option. Australians need groceries regardless of what is happening in the economy, giving the supermarket giant a relatively dependable source of sales.

That stability is one reason I think Coles can work well in an income portfolio.

The company also has opportunities to grow through population increases, online shopping, and continued investment in its supply chain and automated distribution network.

I am not expecting spectacular growth from Coles. But a business capable of steadily increasing earnings and returning part of those profits to shareholders can be a valuable long-term holding, particularly when passive income is the priority.

Lottery Corporation Ltd (ASX: TLC)

Lottery Corporation is another business I think suits an ASX buy-and-hold passive income strategy.

It operates many of Australia’s major lottery brands, giving it a strong position in a market with high barriers to entry.

I like the relatively simple nature of the business. Lottery tickets require little physical infrastructure compared with many other consumer businesses, and the company can generate substantial cash from its established brands.

There is still some variability depending on jackpot activity, but I think the underlying business is well-placed to keep generating cash over the long term.

That should give management the capacity to continue paying dividends while investing enough to maintain the strength of its brands and digital offering.

Amcor plc (ASX: AMC)

Amcor provides a different source of passive income.

The packaging company supplies products used across food, beverages, healthcare, personal care, and many other everyday categories.

That gives the business exposure to demand that can remain relatively resilient through different economic environments.

I also like Amcor’s global scale. Packaging is not a particularly exciting industry, but that is not necessarily a problem for an income investment.

What I want is a business capable of generating cash consistently and returning some of it to shareholders.

Amcor’s large international operations and exposure to everyday consumer products make it the type of company I would be comfortable holding through a range of market conditions.

Foolish takeaway

I would happily own these four ASX passive income shares for the long term rather than focusing only on the ASX stocks offering the highest yields today.

They give investors exposure to travel, supermarkets, lotteries, and packaging, with each business generating cash in a different way.

For me, that mix of income and the potential for earnings to grow over time is much more interesting than simply chasing yield.

The post Why I’d buy and hold these ASX passive income shares appeared first on The Motley Fool Australia.

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• Should I buy Coles shares for passive income?
• Buy, hold, sell: Coles, NAB, CSL shares
• 2 ASX 200 shares to buy and 1 to sell now
• These are the 10 most shorted ASX shares

Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended The Lottery Corporation. The Motley Fool Australia has positions in and has recommended Amcor Plc. The Motley Fool Australia has recommended Flight Centre Travel Group and The Lottery Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

In morning trade on Tuesday, BHP Group Ltd (ASX: BHP) shares are trading for $60.95 each, while the Commonwealth Bank of Australia (ASX: CBA) share price stands at $153.56.

As it stands then, CommBank shares have a 151.9% higher valuation than BHP shares.

Although with a market cap of approximately $310.2 billion, BHP has taken a commanding lead as the biggest company on the ASX. With a market cap of $256.9 billion, CBA comes in at number two.

BHP retook that title from the S&P/ASX 200 Index (ASX: XJO) bank stock on 27 January this year after CBA had held the biggest ASX share crown for almost 18 months. As you may recall, the following few weeks saw the two ASX titans hand that crown back and forth as one stock alternately outperformed the other.

But by April the winds had turned decidedly in BHP’s favour, with iron ore prices remaining resilient and copper prices racing to new record highs.

At the same time, the CBA share price began to come under pressure as investors eyed a potentially deteriorating Aussie economy. With ongoing elevated inflation and higher interest rates, the bank could be facing lower home loans coupled with higher default rates.

With this picture in mind, and their bullish outlook on copper, the team at Regal Partners believe that not only is BHP likely to maintain a larger market cap than CBA, but that both stocks could be trading at a similar price within five years.

BHP and CBA share price matched at $100?

“Phil King and I have often discussed the scenario over the next five years where CBA and BHP are both trading at $100,” Regal Partners investment director Charlie Aitken said (quoted by The Australian Financial Review).

“We’ve generally kept that view to ourselves because it once sounded so outrageous. Today, it doesn’t sound so far-fetched,” he added.

Pointing to the recent growing stresses emerging in the private Aussie credit market, Aitken noted, “I would be astonished if arrears, bad and doubtful debts and credit card delinquencies aren’t all increasing sharply for … banks.”

Regal’s five-year forecast would see the CBA share price fall by almost 35% from current levels, putting it back to November 2023 prices. While Regal expects that BHP’s copper exposure will see the ‘undervalued’ miner outperform over this time amid booming demand for the red metal, spurred in part by the AI revolution.

According to Aitkin:

Where we prefer to invest is where productivity gains from developments in AI and an associated lift in demand for the given product driven by AI: welcome to mining. The modern world simply can’t open for business each day without BHP’s mined products, yet, unlike Jensen Huang, 99.99 per cent of the world wouldn’t recognise BHP chief executive Brandon Craig if they walked past him in the street.

The post Are the BHP and CBA share price headed for parity? appeared first on The Motley Fool Australia.

More reading

• 3 reasons to buy BHP shares for 2027
• Which big 4 bank stock will rise the most before the end of 2026?
• BHP Group vs Rio Tinto shares: Which pays better dividends?
• Up 52% and paying dividends: Are BHP shares a buy, hold, or sell today?
• Macquarie Group vs Commonwealth Bank: Which ASX bank is the better buy?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.