After many years of working, what will you want out of your life in retirement? If you’re still under 40, you may not have given it much thought.
Yet that is the time period when investors should be setting up their retirement plans. In an earlier article I wrote about how people should save up eight times their salary by the time they are ready to retire. There aren’t too many ways to do that quickly. It will take decades.
The first step is to start now, putting your monthly savings into investments. The high-yield stocks below could be part of your blue-chip retirement three or four decades from now.
One high-yield stock with a reputation for raising dividends is Westpac Banking Corporation (ASX: WBC). Its stock pays a 5.2% yield and its dividend has more than doubled in the past ten years. As one of the big four banks, you can imagine the bank will be around for many years, so this blue-chip could keep growing its dividend for decades. The stock is close to setting a new high and could continue up from there.
Retailer Super Retail Group Ltd. (ASX: SUL) has been steadily recovering since late 2013. It may not be a blue-chip yet, but what will it be like in ten or twenty years? It retails a mix of auto accessories, sports and leisure wear as well as camping and boating equipment. The company’s stores like Supercheap Auto, Rebel Sports and Amart Sports are strong brand names that people recognise. The stock yields a healthy 5.4% fully franked. Retail is weak now, but the economy will go through up and down cycles over the decade, so buy it in the down times and reap the bigger gains later.
A third example would be Woodside Petroleum Limited (ASX: WPL), the energy giant. It’s currently expanding overseas, investing in LNG and oil projects. Thanks to its success with several LNG projects offshore from WA, it has billions in funds ready for more international investments. This blue-chip offers a big 5.9% fully franked yield and has a strong track record for increasing its dividends. I think having Woodside in your retirement portfolio is a great way to tap into growth in the energy sector over the coming years.
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Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned.