While getting to retirement age can be a blessing and a curse, the reality of counting on the U.S. government to provide for your needs is not the best idea. The full retirement age is 66 if you were born from 1943 to 1954. The full retirement age increases gradually if you were born from 1955 to 1960 until it reaches 67. For anyone born in 1960 or later, full retirement benefits are payable at age 67. Adding dependable passive income to Social Security is an ideal way for seniors to keep up with rising costs.

According to the Internal Revenue Service (IRS), passive income generally includes earnings from rental activity or any trade, business, or investment in which the individual does not materially participate. It can also include income from limited partnerships, stocks, bonds, and other similar enterprises in which the investor is not actively involved. Combining passive income streams with social security can help baby boomers have a comfortable retirement.

Warren Buffett’s safest passive income stocks, which pay dependable recurring dividends, are perfect for baby boomers looking to supplement Social Security or pension payments. Long-time investors and Buffett mavens are familiar with his quote, “His favorite holding for an S&P 500 stock is forever,” so it is not surprising to report that for all the success and stature Berkshire Hathaway has in the investment world, he has held some of his safest dividend stocks for decades. Four are perfect ideas for baby boomers now.

Why do we cover Buffett stocks?

Few investors have the results and the reputation Buffett has garnered over the past 50 years. While investing has changed over the previous half-century, buying good companies with products and services that are known worldwide while paying dividends will always stay in style.

Ally Financial

With no buildings, the bank posted solid fourth-quarter earnings and offers a solid 3.17% dividend. Ally Financial Inc. (NYSE: ALLY) is a financial services company with the nation’s largest all-digital bank and an industry-leading auto financing business. The company serves approximately 10 million customers with deposits, securities brokerage, investment advisory services, auto financing, and insurance offerings. The company also includes a corporate finance business that offers capital for equity sponsors and middle-market companies.

The company’s segments include:

• Automotive Finance operations
• Insurance operations
• Mortgage Finance operations
• Corporate Finance operations

The Automotive Finance operations segment provides services such as:

• Retail installment sales contracts
• Loans and operating leases
• Term loans to dealers
• Financing dealer floorplans
• Lines of credit to dealers and other services

Insurance operations are a complementary automotive-focused business offering consumer finance protection, insurance products sold primarily through the automotive dealer channel, and commercial insurance products sold directly to dealers.

The Mortgage Finance operations segment includes its direct-to-consumer Ally Home mortgage offering and bulk purchases of jumbo and LMI mortgage loans from third parties. The Corporate Finance operations segment provides senior secured asset-based and leveraged cash flow loans.

Chevron

This integrated giant is a safer option for investors looking to position themselves in the energy sector and pays a big 4.40% dividend. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide through its subsidiaries. It operates in two segments.

The Upstream segment is involved in the following:

• Exploration, development, production, and transportation of crude oil and natural gas
• Processing, liquefaction, transportation, and regasification associated with liquefied natural gas
• Transportation of crude oil through pipelines; and transportation, storage
• Marketing of natural gas, as well as operating a gas-to-liquids plant

The Downstream segment engages in:

• Refining crude oil into petroleum products
• Marketing crude oil, refined products, and lubricants
• Manufacturing and marketing renewable fuels
• Transporting crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car
• Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives

It also involves cash management, debt financing, insurance operations, real estate, and technology businesses.

Chevron announced in late 2023 that it has entered into a definitive agreement with Hess Cor. (NYSE: HES) to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion, or $171 per share based on Chevron’s closing price on October 20, 2023. Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. The transaction’s total enterprise value, including debt, is $60 billion. The Federal Trade Commission approved the deal in October and should close soon.

Coca-Cola

This company remains a top long-time holding of Warren Buffett. He owns a massive 400 million shares and pays a dependable 3.01% dividend. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, offering consumers more than 500 sparkling and still brands.

Led by Coca-Cola, one of the world’s most valuable and recognizable brands, the company’s portfolio features 20 billion-dollar brands, including:

• Diet Coke
• Coca-Cola Light
• Coca-Cola Zero Sugar
• Caffeine-free Diet Coke
• Cherry Coke
• Fanta Orange
• Fanta Zero Orange
• Fanta Zero Sugar
• Fanta Apple
• Sprite
• Sprite Zero Sugar
• Simply Orange
• Simply Apple
• Simply Grapefruit
• Fresca
• Schweppes
• Dasani
• Fuze Tea
• Glacéau Smartwater
• Glacéau Vitaminwater
• Gold Peak
• Ice Dew
• Powerade
• Topo Chico
• Minute Maid

Globally, they are the number one provider of sparkling beverages, ready-to-drink coffees, and juices and juice drinks.

Through the world’s most extensive beverage distribution system, consumers in more than 200 countries enjoy the company’s beverages at a rate of more than 1.9 billion servings a day. It’s also important to remember that the company owns 16.7% of Monster Beverage Corp. (NASDAQ: MNST), which continues to deliver big numbers.

Kraft Heinz

Even in bad times, everybody has to eat, and this company always stands to benefit while paying a tremendous 5.54% dividend. Kraft Heinz Co. (NYSE: KHC) was formed via the merger of H.J. Heinz and Kraft Foods.

The company manufactures and markets food and beverage products worldwide, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee, and other grocery products.

Its geographical segments include North America and internationally developed markets.

It purchases and uses commodities to manufacture its products, including:

• Dairy products
• Meat products
• Tomato products
• Soybean and vegetable oils
• Sugar and other sweeteners
• Coffee beans
• Wheat and processed grains
• Eggs
• Fruits and vegetables

Kraft Heinz brands include:

• Heinz Australia
• Greenseas
• Golden Circle
• Heinz at Home
• Heinz Brazil,
• Kraft Heinz Canada
• Cats Prefer Chef
• Food in a Minute
• Wattie’s For Baby
• Good Taste Company
• Nurture Baby
• Nutri+Plus
• Wattie’s
• Heinz Norway
• Lea & Perrins Kitchen
• Back to Nature Meals
• Bagel Bites
• Bakers Chocolate
• Benihana
• Capri Sun
• Classico
• Claussen
• Heinz 57 Sauce
• Heinz Cocktail Sauce
• Heinz Ketchup
• Kraft Barbeque Sauce

Two Blue Chip Dividend Giants Make Up Almost 40% of Warren Buffett’s Portfolio

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