Most Australians dream of their retirement.
Some aspire to travel the world, some plan to buy a holiday home near the beach, while others just look forward to kicking their feet up and enjoying a well-deserved rest.
Whatever your plans are, you’ll want to make sure you have enough money saved to enjoy it to its full potential rather than constantly stressing about running out.
Of course, contributions from your employer add up, as do your own personal contributions, but growing what is already in your account could go a long way towards building your retirement nest egg.
My suggestion? Position yourself for years of market-beating returns by adding shares of Australia’s very best companies to your self-managed super fund, or SMSF.
But I’m not talking about the “usual suspects”.
It’s fair to assume a lot of the SMSFs’ funds allocated to equities go to Commonwealth Bank of Australia (ASX: CBA) and its Big Bank brethren, along with the miners.
They’ve long been considered ‘safe’ while their dividends have contributed some great returns.
But I’d argue that you can do better than either of those sectors, looking further down the list for dividends and growth (no, you don’t have to choose one or the other)!
For instance, Retail Food Group Limited (ASX: RFG) operates a capital-light business model, with much of its growth funded by the franchisees of its various brands.
It’s growing locally and has promising international ambitions, while it has a solid track record for both earnings and dividend growth. Right now, its shares have almost halved since March 2015 and offer a 5.9% fully franked dividend yield.
Wesfarmers Ltd (ASX: WES), owner of brands such as Coles, Officeworks, Kmart and Bunnings Warehouse is another option.
With more than 100-years of experience under its belt, this company is built to last while there is also the potential for further growth in its existing businesses. Better yet, the shares offer a 4.8% fully franked dividend yield.
Another company to consider is Transurban Group (ASX: TCL), which owns and operates toll roads in Australia and the United States.
Given the importance of toll roads as infrastructure, Transurban possesses strong pricing power too, as highlighted by revenues that are growing faster than traffic numbers on its roads. The shares also offer a compelling 4.2% partially franked dividend yield.
Of course, every investor needs to consider their own tolerance to risk, but adding shares of high-yielding companies with reasonable growth prospects could be a great way to build your retirement nest egg.
Where to invest $1,000 right now
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Motley Fool contributor Ryan Newman owns shares of Retail Food Group Limited. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below.
The Motley Fool Australia owns shares of Retail Food Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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