Which Retirement Stocks Should I Buy
Among a large number of retirement stocks trading on the stock exchanges, we have compiled a list of the best retirement stocks for you to pick from. Investors must look for the most well-established companies in different sectors.
Retirement stocks are ideal for investors looking for regular income after retirement. Thus, dividend stocks form the priority. In addition to the dividend stocks, a few growth stocks should also balance the portfolio of retirement stocks. It will ensure long-term capital appreciation on top of regular dividend income.
Top Stock Lists
Finding Managing And Monitoring The Best Dividend Stocks For Retirement
Successful dividend investors do 3 things well. Those things are
To improve your odds of success in these areas. Here are two of my favorite resources to do so
First, I like the Motley Fool Stock Advisor. For stock recommendations delivered to my inbox every month.
Second, from a different perspective, I also like the Simply Investing Report & Analysis Platform.
Because Simply Investing provides an interactive database covering hundreds of companies. Great for keeping up with all the latest dividend metrics. And monitoring the stocks owned in your retirement portfolio.
Furthermore, Simply Investing provides recommendations on the best dividend stocks. And when to buy them. Helping you to buy the best stocks when they are attractively valued.
Your retirement finances are important. So, dont short-change yourself. Find the best tools and resources and use them to your advantage!
After all, no one can or wants to work forever. And you dont have to. Not with a steady stream of dividend income coming in every month.
Okay. Lets bring this to a close
Dividend Stocks To Buy For Retirement In 2022 According To Reddit
In this article, we discuss 10 dividend stocks to buy for retirement in 2022 according to Reddit. If you want to skip our detailed analysis of dividend investing, go directly to 5 Dividend Stocks to Buy for Retirement in 2022 According to Reddit.
Dividend stocks are all the rage as inflationary pressures plague the economy and investors are grappling for strategies to hedge against the rising inflation. Dividend stocks with seemingly high yields must not be chased blindly, and it is imperative to hold a quality portfolio with companies that provide strong balance sheets, attractive valuations, and a healthy but sustainable dividend payout ratio.
Dividend investing for retirement is extremely popular among young investors active on Reddit. In this article we will mention some stocks that Redditors have been talking about in Reddit threads about smart ways to retire early.
Overall, investors prefer quality names for a retirement portfolio for stability and reliability during turbulent stock market periods, and the most common stocks preferred for a retirement portfolio by Redditors included JPMorgan Chase & Co. , Citigroup Inc. , and 3M Company .
We scoured multiple Reddit discussion threads regarding retirement stocks to invest in, and chose quality names with attractive yields and rich dividend histories. We have ranked the list according to the dividend yield, from lowest to highest.
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Cut Back On Budget And Redirect To Savings
David Peters, founder and owner of Peters Tax Preparation & Consulting in Richmond, Va., has been telling business owners to take a hard look at their budget, paying close attention to where they are spending their money and searching for ways to cut. For instance, they might be able to work at home and save on gas or cut unneeded luxury items. “A smart move would be to cut some of the current expenses so you can continue to save for the long-term goals,” he said.
Retirement Income Fund Vs Target Date Fund
Target-date funds are designed to make investing for retirement as simple as possible. Generally speaking, target-date funds are constructed around a planned future retirement date, which is most often included in the name of the fund, like the Vanguard Target Retirement 2060 Fund .
This objective defines the important differences between these two types of funds. First, target date funds designed for retirement 20 or more years from now typically have a 90% stock and 10% bond asset allocation. While this aggressive allocation is ideal for long-term investors, its not well suited for retirees.
Second, target date funds change their allocation as the target date approaches. These changes shift the allocation more towards fixed income to reduce the volatility of the portfolio as holders get closer to retirement. These changes in asset allocation are known as a funds glide path. Retirement income funds do not change the asset allocation over time.
Target date funds are designed to offer a single fund solution for retirement planning. These funds invest in domestic and international stocks and bonds in one fund. In contrast, retirement income funds are not necessarily designed to be a retirees sole investment choice. Some on our list might serve that purpose, such as the Wellington fund, but thats the exception, not the norm.
The author held no positions in the securities discussed in the post at the original time of publication.
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No Signs Of Slowing Down
With over $2 trillion in market cap, Apple is the most valuable company in the U.S. . And it didnt get there by luck. For decades, Apple has been one of the top players in the technology space, and theres no reason to believe thatll change any time soon. Great management, second-to-none brand loyalty, and innovation at the forefront its hard to lose with that recipe.
Like many stocks, 2022 hasnt been the kindest to Apple, with the stock down close to 6% year to date , even after rallying more than 30% since its June lows. Still, Apple has proven to produce long-term returns that not many companies have been able to replicate.
Cheap Retirement Stocks: Skyworks Solutions
Heres an obvious statement for any investor in the modern world: Life runs on semiconductors. Its the main reason why the Covid-19-fueled supply chain disruption imposed so much devastation globally.
Semiconductor security is national security, which is the overall argument for Skyworks Solutions . Developing computer chips geared for the internet of things, Skyworks is essentially at the forefront of connectivity. From data centers to automotive tech to healthcare infrastructure to aerospace and defense, several key applications run on Skyworks semiconductor products.
Thats the big-picture argument supporting SWKS inclusion among cheap retirement stocks to buy now. Fiscally, Gurufocus.com considers Skyworks to be significantly undervalued. Indeed, the company is an all-around solid long-term bet, featuring a robust balance sheet and excellent growth and profitability metrics.
Based on the evidence, you probably cant go wrong with SWKS so long as youre willing to ride out the present market volatility .
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The 6 Best Retirement Stocks For Investors Over 50
These stocks reflect stable income and low valuation metrics
- The best retirement stocks for investors over 50 have stable income, covered by the company’s earnings, as well as low valuation metrics like P/E ratios.
- Cigna Corp : The health insurer pays a steady dividend that should be able to grow over time.
- JPMorgan Chase : This huge money center bank is cheap with a forward P/E of 9.9x earnings with a 3.50% dividend yield.
- Bank of America : This bank sports an attractive 2.64% dividend yield, but is set to raise the dividend to close to 3% sometime in July with its earnings release.
- AT& T : This company trades on a forward 8.2x multiple with a 5.26% dividend yield.
- Fidelity National Financial : This title, escrow and trust company will post slightly lower revenue but higher earnings-per-share growth by 2023.
- FS KKR Capital Corp : This secured lending BDC run by another private equity firm has a regular quarterly dividend.
These are the 6 best retirement stocks for investors over 50. They reflect stable income, covered by the underlying companys earnings. This includes simple valuation metrics like low P/E ratios, high dividend yields, and good forecast earnings growth.
Retirees have limited incomes from pensions and Social Security. Their investment portfolio no longer needs to maximize growth but simply provide income and essential stability.
Lets dive in and look at these stocks.
Should You Invest $1000 In
Before you consider , you’ll want to hear this.
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The online investing service they’ve run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 27 percentage points. And right now, they think there are 5 stocks that are better buys.
See the 5 Stocks* Returns as of 8/8/22
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British American Tobacco Plc
Dividend Yield as of January 28: 4.90%
Number of Hedge Fund Holders: 9
British American Tobacco p.l.c. is a British multinational corporation that manufactures cigarettes, cigars, and nicotine pouches, with operations in approximately 180 countries. UBS analyst Nik Oliver lowered the price target on British American Tobacco p.l.c. to £3,600 from £3,700 and kept a Buy rating on the shares on January 20.
On July 28, British American Tobacco p.l.c. declared £0.539 per share quarterly dividend, in line with previous. The dividend was paid on November 16, to shareholders of record on October 1. British American Tobacco p.l.c. s dividend yield as of January 28 came in at 4.90%.
Among the hedge funds tracked by Insider Monkey, Orbis Investment Management is the largest British American Tobacco p.l.c. stakeholder as of the third quarter of 2021, owning over 16 million shares worth $573.2 million. Overall, 9 hedge funds were bullish on British American Tobacco p.l.c. , with stakes totaling $724.3 million.
British American Tobacco p.l.c. is a notable dividend stock to hold in a retirement portfolio heading into 2022 according to Reddit, in addition to JPMorgan Chase & Co. , Citigroup Inc. , and 3M Company .
Put At Least 10% Of Income Into Retirement If You Can
Generally, investing experts suggest saving 10% to 15% of your earnings annually over a 40-year-career just to maintain the same standard of living at retirement, said Stuart Robertson, CEO of ShareBuilder 401k. Yet the March survey found that only 38% of businesses surveyed were saving 10% or more. Meanwhile, 24% said they were not currently contributing.
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Best Retirement Stocks: Altria Group
Easily the most controversial name on this list of best retirement stocks, Altria Group offers a very attractive yield of right around 8%. However, you know what they say about high yields it might be a trap to lure you into an unstable business. And this is also a good time to mention that I own shares of MO stock, largely on its underlying cynicism.
Of course, one of the biggest challenges to Altria is that smoking is losing popularity. According to the Centers for Disease Control and Prevention, Cigarette smoking among U.S. adults has reached an all-time low of 13.7% in 2018 a decline of approximately two-thirds in the more than 50 years since the first Surgeon Generals report warned of the health consequences of smoking.
Im not going to pretend that this is an easy company to wager on. However, its also fair to point out that demand for cigarettes and tobacco products, in general, is still strong. Naturally, Altria has depended on this demand profile to raise prices. With the government also applying pressure on the vaping industry, the traditional smoking base could be bigger than many folks realize.
This has cynicism written all over it, but it can also be quite lucrative in exchange for the added risk.
On the date of publication, Josh Enomoto held a LONG position in MO. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
What Retirees Should Invest In: Certificates Of Deposit
Certificates of deposit, or CDs, are a strong, low-risk investment option for retirees. Basically, you give a certain amount of money to a bank. Generally, you can choose this amount, though some banks have minimums. When you put the money in, youll pick a term, generally between one month and 10 years. You cant touch the money until the term is up. When it ends, youll get your money back, plus interest. The interest rate is predetermined and increases the longer the term.
CDs are great for retirees because they force you to save a certain segment of your money for later in your life and you earn interest on top of that. Just make sure you can go without the money for the entire term, as youll face steep penalties if you take out the money early.
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What Is The Maximum I Can Contribute To A Retirement Account
Retirement account contributions limits are often raised year by year. In 2022, the contribution limit for individual retirement accounts is $6,000 . The maximum amount that an individual can contribute to a traditional 401 in 2022 is $20,500. Taxpayers who are 50 and over can make a catch-up contribution of $6,500 for a total of $27,000.
Wrap Up: Best Dividend Stocks For Retirement Portfolios
Today, I shared 15 of the best dividend stocks for retirement income. All have rich histories of paying dividends. And increasing those dividends regularly.
From my perspective, quality dividends from stocks to fund retirement are an excellent option. But it takes time and discipline.
So, get started sooner rather than later.
If you have already begun, then consider adding one or more of these stocks to your retirement investments for solid long-term total investment returns:
- Wisconsin Energy Group
to make the most out of your money!
Please join me as I try to achieve my goals, find my next place to live, and make the most of my money. But understand, I am not a licensed investment adviser, financial adviser, real estate agent, or tax professional. Im a 50-something-year-old guy, CPA, retired finance professional, and part-time business school teacher with 40+ years of DIY investing experience. Im just here because I enjoy sharing my findings and research on important topics. However, nothing published on this site should be considered individual investment advice, financial guidance, or tax counsel. Because this websites only purpose is general information & entertainment. As a result, neither I nor Dividends Diversify can be held liable for any losses suffered by any party because of the information published on this blog. Finally, all written content is the property of Dividends Diversify LLC. Unauthorized publication elsewhere is strictly prohibited.
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Cheap Retirement Stocks: British American Tobacco
Under the current political and social landscape, youre not going to find too many companies more controversial than British American Tobacco . With myriad public advocacy groups warning about the dangers of cigarette smoking for decades, BTI might appear toxic. Nevertheless, under the specific context of cheap retirement stocks to buy now, you might want to take a look here.
True, smoking rates have gone down over the past several years. At the same time, British American Tobacco has embraced the e-cigarette and vaping scene. Further, in September 2021, the company announced that its Vuse brand became the No. 1 global vaping brand by value share.
Vuse products are generally much more portable and concealable than bulky, full-sized vaping devices. As well, the technology undergirding Vuse delivers tight hits that more closely mimic the analog cigarette smoking experience.
As for being one of the cheap retirement stocks to buy now, BTI features a forward P/E ratio of 8.9x, which presently ranks better than 73% of tobacco firms.
Total Return Investment Approach
A total return approach provides income from your investment portfolio in the form of interest, dividends, and capital gains. This type of portfolio invests in a balanced and diverse mix of stock and bond funds.
Social Security retirement benefits will replace only about 40% of your pre-retirement earnings. You’ll need to supplement your benefits with a pension, savings or investments.
In this context, total return means spending a portion of the average annual rate of returns income and appreciation over a longer period , rather than focusing on specific annual return rates or just using portfolio income. The aim is that this total return meets or exceeds your withdrawal rate.
This is a way to build a retirement portfolio to meet the needs of people preparing for a retirement that could last 20 to 30 years or longer, says Rob Haworth, senior investment strategy director at U.S. Bank. It might offer a way to generate a superior total return compared to other investment approaches traditionally pursued in retirement.
Related to withdrawal rate, a total return approach follows a systematic withdrawal strategy, in which a certain percentage of your investment is taken as a distribution each year. The distribution amount generally ranges between 3 and 5% of the total value of the portfolio.
A total return approach can provide:
Challenges of a total return approach:
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What All Of These Best Dividend Stocks For Retirement Have In Common
I selected these stocks because they have 3 things in common. Specifically, they all
- Pay a good amount of dividend income right now
- Increase their dividends every year
- Have appreciating stock prices over the long-run
You can pick and choose among them. To emphasize current income, faster growth, or a blend of both. It is an excellent group of stocks for optimizing your dividend retirement strategy.