The run-up to your retirement is probably going to be a time of mixed emotions. On one hand, you might be looking forward to hanging up your boots, cape or cudgel and enjoying your golden years in a state of relaxation and bliss.
On the other, you might be wondering whether your investments, superannuation and/or pension are enough to fund your living expenses for what will (hopefully) be another few decades.
Tailoring a retirement plan to an individual's circumstances and needs is probably a job for a financial adviser. However, today, I'm going to discuss one ASX 200 stock that I think is a perfect fit for anyone who is ten years or less from their planned retirement date.
Image source: Getty Images
An ASX 200 share market veteran
That stock is Washington H. Soul Pattinson and Co Ltd (ASX: SOL). Washington H. Soul Pattinson, or Soul Patts for short, is an ASX veteran that has been around for more than a century on the Australian share market.
Rather than producing goods or services for customers, Soul Patts functions more like a managed fund or listed investment company (LIC). It holds a huge portfolio of underlying assets that it manages on behalf of its shareholders.
Soul Patts divides these assets into different portfolios. Its 'strategic portfolio' consists of major stakes in a handful of other ASX shares. These include TPG Telecom Ltd (ASX: TPG), Tuas Ltd (ASX: TUA), New Hope Corporation Ltd (ASX: NHC) and Brickworks Ltd (ASX: BKW).
Meanwhile, the company's 'large caps' portfolio holds a number of small positions in a swathe of other blue-chip ASX 200 stocks. These include everything from BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA) to Wesfarmers Ltd (ASX: WES) and CSL Ltd (ASX: CSL).
In addition to these cornerstones of the company's portfolio, Soul Patts has property, private credit, emerging companies and private equity divisions.
Why Soul Patts is a perfect retirement stock
So why do I think Soul Patts is the perfect share for someone approaching retirement? Well, there are two reasons.
Firstly, this company has a long track record of delivering market-beating performance. Back in September, Soul Patts revealed that its shareholders have enjoyed an average return (share price growth plus dividends) of 11.7% per annum over the 20 years to 31 July 2024. That is a substantial outperformance of the broader market.
If you want one thing out of a stock to buy and hold throughout your retirement, it's a consistent performer. There's no guarantee that Soul Patts will continue to deliver this, of course. But I think this track record is a good harbinger of things to come.
Secondly, Soul Patts is one of the most consistent dividend payers on the entire ASX. In fact, this company is the only ASX share that can claim to have delivered 24 years and counting of annual dividend pay rises. Yep, Soul Patts has increased its annual dividend every year since 2000, including 2024.
I probably don't need to explain why that is invaluable to someone approaching retirement.
All in all, I think Soul Patts stock is a perfect fit for any ASX investor, but particularly anyone approaching retirement. As such, I would happily invest $10,000 into this company right now and would urge anyone nearing their golden years with ten large to spare to do so as well.
