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3 Dividend Stocks to Set Yourself Up for Retirement

Retirement plan
Retirement plan

Written by Amy Legate-Wolfe at The Motley Fool Canada

It’s been really hard for me to think about retirement these days. Granted, I’m only in my 30s, but I have to admit that when the market is good, I’ll start thinking about it. When the market is bad, I don’t want to think about it at all.

This all comes down to the fact that I have two kids at home. In my retirement, I don’t want them to have to worry about me. But when the market is down, all I do is worry about them. Everything that’s cut from the budget affects me, not my kids. So, it can be really hard to justify putting cash aside for me.

But I had it right in the first place. I don’t want my kids to worry about funding my retirement and whatever happens after retirement. This is why, even when times are tough, I’ll put cash aside. And I’ll make sure that cash goes right to dividend stocks.

Why dividend stocks?

Dividend stocks are great now and even better later when considering retirement. With cash flow an issue, these stocks pay me to own them. So, I want as much dividend income coming in as possible.

I also want these dividends to remain stable or ideally grow. If that happens, I not only can look forward to adding more cash to my portfolio as the years go on, but I can also look forward to creating income for myself in retirement.

That income could potentially be massive. If I continue to add cash year after year, by the time I retire, I could have an incredible passive-income payment coming my way. How much? Let’s look with these three dividend stocks as examples.

Three dividend stocks I’d choose

The three dividend stocks I would choose when considering a portfolio for retirement are NorthWest Healthcare Properties REIT, Granite REIT, and Canadian Utilities. Each of these dividend stocks have very similar things in common. They’re all in stable industries, and all own property. That property will only increase in value over the years, allowing for more income and more acquisitions.

NorthWest stock invests in healthcare properties, Granite stock in industrial and warehouse properties, and Canadian Utilities stock in utility assets. All of them have global locations, have expand through acquisitions on a regular basis. So, with these in mind, I’m assured of solid, stable growth in shares and in dividend income.

How much by retirement?

Let’s say I can afford to put aside $5,000 each year towards these three dividend stocks in my retirement portfolio. I then reinvest any of the dividends I have coming in. So, that’s an investment of $1,667 in each stock every year for about 35 years.

In that time, my retirement portfolio would come to a total of $2,471,098 based on historical performance and reinvesting dividends. I would also have a total passive-income stream of $127,372 per year! So, don’t worry, kids! I’ll be totally on my own.

The post 3 Dividend Stocks to Set Yourself Up for Retirement appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Canadian Utilities?

Before you consider Canadian Utilities, you'll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in September 2022 ... and Canadian Utilities wasn't on the list.

The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 21 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks * Returns as of 9/14/22

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Fool contributor Amy Legate-Wolfe has positions in NORTHWEST HEALTHCARE PPTYS REIT UNITS. The Motley Fool recommends GRANITE REAL ESTATE INVESTMENT TRUST and NORTHWEST HEALTHCARE PPTYS REIT UNITS. The Motley Fool has a disclosure policy.

2022