Retirees are usually much more concerned with income than growth, but this doesn’t mean they should avoid investing in stocks. In fact, most financial advisors encourage retirees to have at least some stocks in their investment portfolios, not only to help offset inflation but because many stocks pay excellent dividends.

However, a nice dividend doesn’t necessarily make a stock suitable for retirees. If I were retired now, I’d be very wary, for instance, about owning shares of Nokia Corp. (NYSE: NOK) despite the stock’s 7.8% yield. Sure, we’ve all heard of this company, the world’s largest mobile communications provider, with about 1.5 billion customers in more than 150 countries. But the company could be headed for an extended slump — analysts expect earnings to shrink 3% annually in the next three to five years — and its shares can be extremely volatile. On July 11, for example, a pretty weak day in the market when all the major market averages fell sharply, Nokia shares were down 4.2% compared with the 1.8% decline of the S&P 500.

What retiree needs that sort of aggravation, even for a 7.8% yield?

For those seeking strong dividends, I suggest instead what may turn out to be the “perfect retirement stock.” Like Nokia, this company is in the telecommunications industry. However, it’s nowhere near as volatile — shares only fell 1.1% on July 11, for example — and analysts project solid earnings growth of 7.5% a year through 2016. At 5.5%, the dividend yield is also attractive, especially because investors would be taking so much less risk to receive it.

I’m talking about AT&T Inc. (NYSE: T), the dominant telephone service provider in 22 states and the second-largest wireless carrier in the United States, with about 97.5 million active subscribers. In addition to a nice yield, solid earning potential and below-average volatility, I consider AT&T a perfect retirement investment for several other reasons…

1. Staying on the cutting edge.
While certain industry peers like Windstream Corp. (Nasdaq: WIN) and Frontier Communications Corp. (NYSE: FTR ) continue to depend mainly on obsolete rural landlines for profits, AT&T keeps evolving. The company has become a major player in the wireless industry, which accounts for 48% of sales. And now that the firm is no longer the sole iPhone provider (an exclusive contract with Apple (Nasdaq: APPL) to offer the device ended more than a year ago) management is looking to gain more revenue from Android-powered devices.

2. Making profitable acquisitions.
In its biggest deal since acquiring BellSouth in 2006, on March 20, AT&T agreed on to buy T-Mobile USA from Deutsche Telekom AG for $39 billion in stock and cash. The deal, scheduled to close in the Spring of 2012, will make AT&T the largest wireless operator in the United States, with a subscriber base of about 130 million compared with 100 million for archrival Verizon (NYSE: VZ). Analysts say the acquisition should also create opportunities to increase smartphone penetration and data revenue, as well as generate more revenue from higher-end customers.

3. Fostering loyalty.
In the past couple of years, management has done a fine job of improving customer service. Analysts say customer loyalty to AT&T is approaching that of Verizon, which is known for its remarkable leadership in customer loyalty. The T-Mobile deal is likely to bring in even more loyal customers. Indeed, 73% of T-Mobile users surveyed in the first quarter of 2011 said they’d subscribe to T-Mobile again, according to a study by Vocal Laboratories Inc. on phone-based customer service quality.

4. Maximizing the here and now.
AT&T is beginning to focus more on newer technologies such as the Android, but it hasn’t forgotten existing revenue sources, either. Although the company no longer has exclusive rights to the iPhone, it’s still rapidly expanding its iPhone customer base, reporting 3.6 million new activations in the first quarter of the year. The iPhone revenue should continue to be a key contributor to the bottom line for quite some time, analysts say. So should the company’s high-speed Internet service, which is the largest in the United States with about 16.3 million customers.

Action to Take –> Retirees in search of good, solid dividend-paying stocks should consider AT&T for all the reasons I mentioned above. Financially, the company is in fine shape and has free cash flow of more than $14 billion, nearly $9 billion more than it needs to cover the rest of this year’s dividends. Having that much extra cash on hand is typical for AT&T, so I’m confident the company’s dividend  is very secure.

There’s potential for disappointing stock performance in the next two or three quarters as the firm transitions away from its dependence the iPhone. I wouldn’t be too concerned about any near-term bumps, though, because AT&T is very likely to succeed — and keep paying attractive dividends — in the long-term.

P.S. — One of these stock has plowed through 8 bear markets and has returned over 170,000% since 1972. Every $700 you invested back then would be worth more than $1 million right now. Today, the company is raising its dividends, spending billions to buy back its own shares, making smart acquisitions, and is the dominant leader in a $30 billion market. This is just one of the 10 best “Forever” stocks to own today.