8 Stocks to Own in Retirement

Your portfolio in retirement should look very different from the one you own in prime earning years. It should resemble Warren Buffett's famous two rules for investing:

• Rule No. 1: Don't lose money.
• Rule No. 2: Don't forget Rule No. 1.

That doesn't mean your retirement portfolio should consist of only municipal bonds and government Treasuries. You can also have a rich portfolio of stocks, though maybe not those high-flying penny stocks you once dabbled in.

What follows are eight solid businesses that offer investors stability, along with a solid foundation of income, growth, or both that will let your portfolio live on long after you shuffle off this mortal coil.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

E-commerce giant Amazon.com (Nasdaq: AMZN) might seem a strange choice to kick off a retirement portfolio, but the online retailer is now so ingrained as part of our shopping experience that it is the first place people go to look when they're ready to buy and should be a key component of one's long-term investments.

Moreover, its Amazon Web Services is the critical infrastructure upon which hundreds of businesses, and even many government agencies, function. That embeds Amazon even deeper into the health of our economy, so that combined with its e-commerce dominance, the company could be substituted in the old saw, "As goes General Motors, so goes the nation."

ALSO READ: 3 Stocks to Help You Build Retirement Wealth

Including Apple (Nasdaq: AAPL) on this list underscores the notion a retirement portfolio can be vibrant and contain growing tech stocks. The premier consumer products giant continues to understand the public's desire for both form and function -- and willingness to pay a premium for the privilege.

Apple just reported its first-ever quarter where sales exceeded $100 billion as it now has well more than 1 billion iPhones in circulation worldwide and over 600 million people paying for its paid services.

The company hasn't really missed a beat since Steve Jobs' passing, and it continues to offer prospects for further growth. It pays a small dividend, though with it yielding 0.8% annually, no one's going to be living off that in retirement. But it does provide an added component to the capital appreciation investors can expect.

AT&T (NYSE: T) is probably the more common type of stock retirees would expect to see in their portfolios, even though the telecom giant has come a long way from when it was Ma Bell.

While AT&T does pay a substantial dividend that yields 7.3% annually, its far-flung operations in broadband, video, and streaming media complement and expand its wireless base. Still there is a cost involved in maintaining a payout amid growing investments in new technologies and entertainment options, though all eyes are on how well its HBO Max service can stand up to the competition.

Streaming looks as though it could become the primary way we consume movies in the future, and though a number of new services have also planted flags in the space, AT&T is quickly catching up to the leaders. It has 40 million HBO Max subscribers now, reaching this threshold several years ahead of expectations.

AT&T still needs to sort out how best to pay for all of the fingers it has in the various pies, but the telecom should continue to ring up growth and income for years to come.

Disney (NYSE: DIS) is not just a stock for kids, and though the COVID-19 pandemic put a big dent in its operations, it hasn't really hurt its performance, as shares are 22% higher than they were a year ago, before the coronavirus outbreak's impact really began to be felt.

Still, Disney did have to suspend its dividend last year as its theme parks were shut, its cruise ships kept in port, and its movie studios closed. The saving grace was its Disney+ streaming service that blew away all expectations for penetration in the market and quickly became the standard by which other services need to compare themselves to see if they can survive.

With the rest of Disney's operations flickering back to life, it will be able to resume the highly interconnected relationship among them, which will eventually lead to a resumption of the entertainment leader's dividend.

A once-in-a-lifetime pandemic should not deter a retiree from investing in Disney for both income and growth.

ALSO READ: Why Is Everyone Talking About Disney Stock?

Oil and gas giant ExxonMobil (NYSE: XOM) is another old line retirement portfolio stalwart that was sent topsy-turvy by the pandemic. Yet unlike Disney and even those in its industry, such as Chevron and BP, Exxon did not cut its investor payout, which now yields 7.8% annually.

While many criticized the energy giant for fighting to maintain the dividend, it sees its quarterly payments as a bond between it and its investors. Yet it has had to cut back on exploration and production as even depressed oil prices have not allowed for much, if any increase, in demand.

Yet despite renewable energy sources gaining greater traction, fossil fuels are not going away, not anytime soon, and not even longer than that. And besides, Exxon is also investing in alternative energy opportunities and has plenty of room to boost its profitability and its cash flows.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

While Tesla (NYSE: TSLA) grabs the electric vehicle headlines, particularly after notching its first year of profit-making, Ford Motor Company (NYSE: F) could be the better long-term bet, especially for a retiree.

That's because Tesla isn't making profits from selling cars, but rather from selling tax credits to automakers that don't sell enough EVs. Back those credits out, and Tesla is still producing some whopping losses, meaning it might not ever make a profit as manufacturers like Ford increase their own production.

Ford is in a long-term restructuring, but one that looks toward a future where it is a contender in the EV market -- not only through its investment in Rivian but also in electrifying further its own base, such as its recent Mustang Mach-E, its first high-range EV.

Priced at a significant discount to Tesla, Ford can provide for the capital appreciation its rival may not, and though it suspended its dividend last year, that could come back, too, as the pandemic moves further away in the rearview mirror.

Real estate investment trust Realty Income (NYSE: O) is another reliable retirement portfolio denizen, paying a monthly dividend for over 50 years and raising it 73 times since going public in 1994. It truly lives up to its marketing slogan, "The Monthly Dividend Company."

Realty Income specializes in long-term triple net leases, or property leases where the tenant is responsible for paying the insurance, maintenance, and property taxes.

With the average lease being almost 10 years long and spread over 300 companies in 50 different industries, and no one tenant accounting for more than 10% of its revenue, it is well diversified to protect its downside. Even in today's dicey real estate market, the dividend that currently yields 4.8% annually will continue to be paid for years to come.

ALSO READ: 2 Dividend Stocks to Buy Today

Bookending the inclusion of Amazon is its physical retail counterpart Walmart (NYSE: WMT), the behemoth everything-you-need supermarket and retailer. What makes Walmart a particularly potent portfolio denizen is its ability to hold Amazon's feet to the fire online. Arguably it has been Walmart's presence in e-commerce that has sped up Amazon's own investments in its business. Now with its own Amazon Prime-like program called Walmart+, the retailer could encroach even further into its rival's territory.

Better still, Walmart has been a friend to investors for decades and will undoubtedly continue to be one for decades more. It has increased its dividend every year since initiating the payout in 1974, and generates an excessive amount of free cash flow to cover the payment and keep increasing it. Walmart's dividend yields 1.5% annually.

There are any number of investments that could be considered essential to a retiree's portfolio, and a good mix of assets that can preserve capital should be part of it. But there's no reason an investor needs to forgo the potential for capital growth along with income preservation.

The eight preceding stocks should provide a sufficient allocation to both growth and stability, with just enough risk to juice the returns to ensure an investor does not outlive his nest egg.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rich Duprey owns shares of AT&T, ExxonMobil, and Realty Income. The Motley Fool owns shares of and recommends Amazon, Apple, Tesla, and Walt Disney and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool has a disclosure policy.