In retirement, a regular income from your investment can be the difference between a worry-free lifestyle and a struggle. That's why, it's paramount for you to start securing your retirement right now. Even if you're still 5, 10 or 50 years away from the day you plan to retire, its importance cannot be overplayed.
Take, for example, the frightening results of a study conducted by Suncorp Group Ltd (ASX: SUN) in late 2013. The report surveyed 2,000 Australians and found, "an alarming disconnect between what Australians want in their retirement and what they are actually working towards."
Perhaps even more notable was a report recently commissioned by REST Industry Super which found less than half of Australians over 50 were looking forward to retirement and a whopping 64% believed they would rely on the Age Pension.
The time to invest for your later years, is now.
So, with that in mind, here are three companies included in the S&P/ASX 200 Index (ASX: XJO) (INDEX: ^AXJO) you could consider holding for the ultra-long term to provide a stable income in retirement.
1. BHP Billiton Limited (ASX: BHP) might seem like an odd choice for a retirement portfolio given its dependence on volatile commodity prices. However with diversified operations and a market capitalisation of around $100 billion, BHP is one the safest ways to play the world's increasing demand for natural resources. BHP, like Rio Tinto Limited (ASX: RIO), is currently focused on driving down costs, paying off debt and cutting non-core businesses. This increases the chances of higher dividend payments to shareholders. Currently it is forecast to pay a 3.6% fully franked dividend.
2. Coca-Cola Amatil Ltd (ASX: CCL) is another ASX heavyweight which might seem like an odd stock pick for retirees after the turbulence its share price has experienced over the past 24 months. However CCA's exclusive products, such as Coca-Cola, Jim Beam, Sprite and Mother (to name a few), are some of the most renowned beverages on the planet. Once the company moves past the adverse macroeconomic conditions in Indonesia (a key growth prospect), profits will likely rebound to their growth trajectory. It's forecast to pay a 4.8% dividend in the next 12 months.
3. Australia and New Zealand Banking Group (ASX: ANZ) is a stock which would fit nicely into a well-diversified retirement portfolio. Although I feel ANZ trades around fair value (and is therefore not a standout 'Buy' at current prices), if investors get a cheaper entry point into the stock they should add it ahead of the other major Australian banks. With its Super Regional Strategy now gaining traction, ANZ will likely grow earnings and dividends quickly in coming years. Analysts are forecasting the bank to pay a 5.3% fully franked dividend.
The BEST dividend stock on the ASX is here
Each of these blue-chip stocks could do well in the next 10 years thanks to their generous dividend yields and ability to grow earnings. However, each of these companies is already a dominant player in their respective industry, making it harder for them to rapidly increase earnings.
