In the past twelve months, two worrying reports have emerged about the financial situations of many Australians approaching retirement. Both from prominent Australian financial institutions, they highlighted a need for Australians to better prepare themselves for retirement.
One particular finding from Suncorp Group Ltd’s (ASX: SUN) study, conducted in late 2013, has me particularly concerned. The bank said the results from its survey found: “An alarming disconnect between what Australians want in their retirement and what they are actually working towards.”
Preparing for your retirement has never been more important, but no matter how old you are or how long you have left until retirement, it’s never too late to start setting yourself up.
Here are four stocks which I believe will provide a steady dividend income and be able to weather the storm of an economic downturn, making them suitable additions to a risk-averse long-term portfolio.
1. Telstra Corporation Ltd (ASX: TLS) is forecast to pay a respectable 5.5% dividend in the next year. With rapidly growing cash flows and an expansion into Asia, Telstra will likely grow both earnings and dividends over the coming decades. With a large contingency of customers in the local market, it has a perfect base from which to leverage its growth.
2. Washington H Soul Pattinson & Co. Ltd (ASX: SOL) is a diversified investment company with significant holdings in other listed entities including TPG Telecom Ltd (ASX: TPM) and Brickworks Limited (ASX: BKW). It has been in existence for over a century thanks to its conservative investment approach and long-term focus. It is forecast to pay a 3.2% dividend in the next year.
3. Transurban Group (ASX: TCL) is the owner of major toll roads throughout Australia and the United States. There are few more reliable businesses than toll roads. Although its shares currently trade on lofty earnings multiples the share price reflects the long-term potential of this business. In addition to ongoing increases in toll prices, Transurban recently acquired Queensland Motorways for around $7 billion and is continually widening and upgrading roads for increased traffic. With huge barriers to entry and capable management, this is one blue chip stock which investors truly can buy and hold for decades.
4. BHP Billiton Limited (ASX: BHP) needs no introduction and despite its share price falls this year, it will continue to be a dominant player in global resources. Unlike Rio Tinto Limited (ASX: RIO) its earnings do not depend upon the performance of one commodity. Despite the downturn in the iron ore price, investors can expect BHP to capitalise on the ongoing demand for natural resources. It is forecast to pay a 3.6% dividend in the coming year.