5 Great Dividend Stocks for Retirees to Buy

One important factor in retirement investing is replacement income. When people leave the workforce, they no longer have a paycheck to rely on. Investors who want to replace this income are in a tough spot right now, because the typical sources of investment income aren't pulling their weight. With interest rates still at historic lows, traditional income vehicles such as bonds or bank certificates of deposit are yielding very little. Consider that the 10-year U.S. Treasury bond, which is a benchmark for fixed income more broadly, yields just 2.6%. 

For retirees willing to dip their toes into the stock market, quite a few stocks offer significant income potential via strong dividends.

Technology is a surprising source of dividends
For many years, investors couldn't count on the technology sector for dividends. Investors who desired income from their stock investments had to look elsewhere, toward traditional dividend payers such as utilities or consumer goods companies. However, the technology sector has become a great place to look for dividends. That's because the largest technology companies are no longer speculative highfliers that need to retain every dollar of revenue to reinvest in the business.

These companies are instead stable and highly profitable, and due to their robust cash flows, they're flush with cash. This has shareholders increasingly demanding their fair share, and companies in the tech sector are steadily turning into reliable dividend stocks.

Here are five dividend payers in the tech sector to start your research.

TTM = trailing 12 months.

Apple is the largest company in the world by market capitalization and offers its namesake electronics products. Microsoft is a software megacap, with products including Office and Azure. Intel and Texas Instruments make chips for a variety of industries. Intel's chips are predominantly found in personal computers, while Texas Instruments focuses primarily on analog and embedded processors, for things like power management and connectivity. Verizon is a huge telecommunications company that offers television, Internet, and cellular phone service across the country.

The potential for a blended tech dividend portfolio
This list is a mix of stocks that do business in a variety of industries across the technology and telecom spaces. In addition, the group offers another layer of diversification because of their varying dividend yields.

For example, Apple is a lower-yielding stock with higher dividend growth potential due to its very low payout ratio. The payout ratio is a financial metric used to analyze how much of a company's earnings are distributed to investors as dividends. The lower the percentage, the higher the dividend growth potential, generally speaking. By contrast, Verizon is a higher-yielding dividend stock with a higher payout ratio than Apple. Telecommunications companies typically pay larger dividends than most other technology stocks. Meanwhile, Microsoft, Intel, and Texas Instruments offer above-average yields but still have room for solid dividend increases.

In the post financial-crisis world, investors can't get enough of dividends. This has spread into the technology sector, and companies are slowly but surely embracing the merits of these payouts. For investors, this means the technology and telecommunications sectors could be great sources of income. This could be particularly valuable for retirees who want to generate income from their savings. If that's you, and you're willing to take the risk of owning stocks, this list is a good place to begin your research. Don't forget to check out our 13 Steps to Investing Foolishly.