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Guardians of Your Golden Years: 7 Stocks Every Retiree Needs to Own

Investing in your golden years is very different from investing in your young age. You cannot take as much risk now, but you still want to see your money grow. The stock market is a good place to park your funds, but the trick is to choose stocks that pay dividends and have the potential to achieve growth. Long-term investing can generate steady returns, and if you choose the right businesses to invest in, you will see your investment grow over time. If you are a retiree and looking for stocks to invest in, here are top stocks for retirees that will bring stability, passive income and steady growth to your portfolio.

Stocks for Retirees: Microsoft (MSFT)

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A stock for every retiree’s portfolio, Microsoft (NASDAQ:MSFT) is a tech giant that has soared over 250% in the past five years. Trading at $425, the stock is up 14% year-to-date and is set to benefit from artificial intelligence (AI) investments.

The company has already integrated AI into its products and services and expects to start earning returns this year. Its cloud platform, Azure is already a huge hit in the market. The company will launch a generative AI security software to stay ahead of the AI race.

The new service will launch on April 1 and help cybersecurity professionals understand the threats. Powered by OpenAI’s GPT-4, Copilot for Security will be available for general purchase.

Fundamentally, Microsoft is a strong company without enough liquidity to keep investing in the business and rewarding shareholders. It enjoys a dividend yield of 0.71%. Microsoft is set for an AI-powered revenue surge this year, and investors are set to benefit.

Johnson & Johnson (JNJ)

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A highly undervalued Dividend King, Johnson & Johnson (NYSE:JNJ) is a great stock for a retiree’s portfolio. The healthcare giant has a massive presence across the globe and is set to gain strength after the spin-off of the consumer products segment, Kenvue (NYSE:KVUE). 

This will allow JNJ to allocate its resources to high-growth segments. It reported fourth-quarter revenue of $21.4 billion, where the pharmaceutical segment was up 4.2% while the medtech segment was up 13.3%.

JNJ stock is a long-term investment with a dividend yield of 2.99%. Trading at $159, the stock has soared 15% in the past five years. It has seen a slow but steady upside, which makes it a highly resilient stock in times like today.

The company is leaning on acquisitions to grow its portfolio and that has helped achieve growth. It has enough liquidity to keep investing in businesses while also rewarding shareholders. The management expects annual growth in the range of 5% to 7% from 2025 to 2030.

Visa (V)

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A fintech giant, Visa (NYSE:V) holds a global presence and caters to more than 100 million merchants. The company has become indispensable in our lives, and it has an impressive business model where it earns steady income while keeping the operating costs low.

Visa will earn a fee whenever its card is used. As the world transitions towards a digital economy, card usage will be on the rise, and that is where Visa can benefit.

The company already has a strong balance sheet and reported net revenue of $8.6 billion in the first quarter results. Its payment volume increased 8% year-over-year (YOY) in the quarter, and the total processed transactions for 2023 stood at $57.5 billion, up 9% YOY.

A dividend stock, Visa has a modest yield of 0.73% and is trading for $286 today. It is up 11% YTD and has soared 34% in the year. It raised the quarterly dividend by 15.6% YOY at the end of 2023.

Stocks for Retirees: Caterpillar (CAT)

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While Caterpillar (NYSE:CAT) is heavily dependent on the state of the economy, it also operates in a sector that will never become outdated — the construction industry. To achieve economic growth, the construction industry will remain crucial.

As the economy improves, so will Caterpillar’s business. It saw a dip in volume while a rise in revenue in the recent quarter, which could be due to inflation. The company may see ups and downs, but it will continue to remain a strong player in the construction industry. One cannot argue against this sector because it has long-term growth potential.

Trading at $341 today, CAT stock is very close to the 52-week high and is up 16% YTD. It enjoys a dividend yield of 1.52% and is a fundamentally strong business. Its fourth-quarter revenue came in at $17.1 billion, up 3% YOY, and reported a full-year profit of $20.12 billion.

The company ended the year with $7 billion of enterprise cash and returned $7.5 billion to investors through dividends and share buybacks in 2023.

Amazon (AMZN)

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E-commerce company Amazon (NASDAQ:AMZN) has come a long way from its modest beginning as a bookseller. The company sells everything today and is no longer just an e-commerce business. AMZN is one of the best stocks for retirees.

It has steadily expanded its umbrella and has a presence across multiple industries today. That shields the business from the sector’s ups and downs. Amazon’s biggest revenue generator is the cloud business, Amazon Web Services (AWS), and its advertising segment.

There is ample growth potential from the current level, and I see AWS gaining a higher market share. It holds a 31% market share currently, and with the growing investment in this sector, we could see it expand.

It reported impressive quarterly results, generating revenue of $170 billion in the fourth quarter and bringing net sales to $574 billion for 2023.

Procter & Gamble (PG)

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A household name, Procter & Gamble (NYSE:PG) is a dividend stock with a history of increasing dividends for over 65 years. The company established itself as an industry leader and enjoys solid cash flow generation.

In the recent quarter, it saw a 4% rise in organic sales, driven by the rise in demand across markets in Europe, Latin America and North America. Despite high inflation, PG has shown resilience and organic growth.

It has a dividend yield of 2.33% and is trading for $161 today. The stock is at its 52-week high and is up 10% YTD. It has generated over 55% returns in the past five years and is steadily rallying upwards.

The company owns some of the biggest brands and has a presence across multiple countries. It generated $82 billion in sales in 2023 and reiterated the guidance for organic sales growth this year for 4% to 5% while improving the guidance for EPS growth to 8% to 9%.

Coca-Cola (KO)

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Beverage company Coca-Cola (NYSE:KO) is a popular name across the globe and it enjoys strong brand loyalty. Everyone reading this must have tried at least one Coca-Cola product in their lives. The company is diversifying into tea, healthy beverages and fruit juices to appeal to the changing demands of consumers.

It is a resilient stock that has been moving in the range of $52 to $64 over the past year. While you might not see a major upside with the stock, it will continue to generate passive income for you. KO is one of the top stocks for retirees.

With a dividend yield of 3.21%, KO stock has increased dividends for over 60 years. It is trading at $60 today and could continue moving sideways. If you are a risk-averse investor looking to own a steady stock, KO is a good choice.

With over 45% of the market share in global non-alcoholic beverages, Coca-Cola has a strong presence in the industry and is considered a leader. It is hard to beat the company when it comes to sales and revenue.

On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.

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