In late 2013, banking and insurance giant Suncorp Group Ltd (ASX: SUN) surveyed 2,000 Australians and found, "an alarming disconnect between what Australians want in their retirement and what they are actually working towards."
More recently a report commissioned by REST Industry Super, found that less than half of Australia's working age population over 50 were looking forward to retirement and 64% believe they will rely on the Age Pension. While some (9%) said they don't trust our superannuation system, many (45%) were concerned about constant changes.
These reports highlight the reality too many Aussies face. But it's only expected to get worse.
Between now and 2030 the ratio of pension recipients to the working age population is expected to rise from 20 per 100 to 36 per 100, respectively. If there was ever a time to start making strides towards your financial freedom, it is today.
I believe one of the best ways to do this is through the stock market. As long as you have an investment timeframe of more than five years, the benefits of 'buy and hold' investing are second to none.
If you choose the right companies you'll receive regular, mostly tax effective, dividend payments and make modest or substantial capital gains. The hardest part is committing your money to the market and being able to remain calm in times of uncertainty.
As long as you pick the right companies you can sleep easy at night knowing they'll survive an economic downturn and emerge on the other side of it, stronger. Here are five promising blue chip companies which have experienced tough economic environments and grown even stronger as a result.
1. Telstra Corporation Ltd (ASX: TLS). With a 5.3% fully franked dividend, growing cash flows and its crosshairs fixed on Asia, Telstra is a good long-term buy and hold.
2. Coca-Cola Amatil Ltd (ASX: CCL). After suffering a big setback in share price throughout 2013 and early 2014, CCA appears ripe for the picking. It is forecast to pay a 4.6% dividend.
3. Challenger Limited (ASX: CGF) is Australia's largest annuities provider to retirees and has a growing funds management business. With baby boomers approaching retirement, it's pretty easy to imagine demand for its services growing over the next 20 years. It pays a 3.2% dividend.
4. Westfield Retail Trust (ASX: WRT) owns a portfolio of property and shopping centres in Australia and New Zealand along with its partner Westfield Group (ASX: WDC). It has a consistent dividend, expected to be 6.3% in the next year.
5. Amcor Limited (ASX: AMC) has growing overseas earnings and will be one of Australia's major beneficiaries of online shopping and increased freight. It's currently forecast to pay a 3.7% dividend.
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Before even considering buying shares on the market, you must get advice from a qualified professional or a company with a proven track record. I've highlighted these five companies as good long-term buys, but they could fall in value just as quick as they could rise (probably even quicker).
