The Australian population is ageing, and life expectancy is increasing steadily thanks in large part to our excellent quality of life and our health system. In fact, recent statistics from the Australian Bureau of Statistics showed that the average Aussie male can now expect to live beyond 80 years old – a feat also shared by Australian women.
As great as that is, it does introduce one prominent issue. The funding of retirement.
People can no longer plan to have enough for just 10 years post-retirement, with it becoming increasingly necessary to ensure you have enough to last 20, 25, or even 30 years. As highlighted by The Fairfax press, the Association of Superannuation Funds of Australia has suggested a couple could need $58,000 per annum to live comfortably. That figure could be significantly higher after 20 years once inflation is taken into account.
One of the greatest ways to build an amount capable of sustaining a comfortable lifestyle is to invest in the share market. While investing in shares does carry a higher level of risk than other asset classes, it can also deliver far greater returns – especially when dividends are a key theme amongst your investments.
For instance, here are three companies you may consider buying a stake in. Each offer growth potential as well as generous dividend yields.
- Coca-Cola Amatil Ltd (ASX: CCL) offers a tasty 4.4% dividend yield which comes 75% franked. The company's shares are trading at a very attractive price and could deliver fantastic capital gains over the coming years, too.
- Woolworths Limited (ASX: WOW) offers a fully franked 4.1% dividend, equating to a grossed-up 5.9%. The stock has been a reliable dividend payer over the last two decades and could recognise significant growth from its Masters Home Improvements chain.
- M2 Group Ltd (ASX: MTU) is a great alternative to Telstra Corporation Ltd (ASX: TLS). M2 is becoming an increasingly dominant player in the telecommunications industry and its shares have more growth potential than Telstra. In addition, they yield 3% fully franked.
While it would certainly be wise to keep some of your cash out of shares, holding high-yield shares like those mentioned above through your retirement can be a great way to develop a regular income stream, whilst also recognising capital gains along the way.