If you’re close to retirement and worried that you haven’t saved enough, I believe your 50s can still be some of the most productive years of your investing journey. That’s because you may be earning more than you did earlier in your career, some major household expenses might already be behind you, and you likely have a clearer idea of what retirement will actually cost.
Given these favourable factors, you may turn your 50s into a powerful opportunity to accelerate your retirement savings and build a much stronger financial future. Instead of chasing risky and speculative bets for quick gains, you should ideally try to focus on consistently investing what you can afford and allowing well-established TSX-listed businesses to do some of the work.
Before I highlight two top Canadian stocks you can consider buying for your retirement plan, let’s understand how you can make the most of the years remaining before retirement.
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Make your 50s count with a smarter retirement plan
If you’re behind on retirement savings, the key is to make the most of the years you still have before retirement. Besides setting aside more money whenever possible, you can use your Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) to invest in fundamentally strong dividend stocks.
Reinvesting regular dividend payouts could help you buy more shares and benefit from compounding over time. More importantly, focusing on the shares of established Canadian companies with consistent earnings could help you grow your retirement savings without chasing speculative investments.
Now, let me talk about two Canadian dividend stocks that I believe could help you make the most of your remaining wealth-building years.
Sun Life stock
The first Canadian stock worth considering for your retirement catch-up plan could be Sun Life Financial (TSX: SLF). This Toronto-based financial services giant provides insurance, wealth management, health benefits, and asset management solutions across several international markets.
SLF stock has gained 29% over the last year and currently trades at $112.43 per share, giving it a market cap of $62.8 billion. Besides its impressive gains, SLF rewards investors with a 3.4% annualized dividend yield.
What makes Sun Life even more attractive is its diversified business, which continues to back earnings growth. In the June quarter, its underlying net profit rose 11% year-over-year (YoY) with the help of strong performance in Canada, Asia, and its U.S. health business.
The company’s Canadian business posted a 23% YoY increase in underlying earnings in the latest quarter, supported by higher health insurance premiums and favourable insurance experience. Similarly, its Asian operations delivered 18% YoY underlying earnings growth, helped by strong sales in Hong Kong.
Sun Life’s focus on quality acquisitions, growing private credit offerings, and investments in digital capabilities could improve its earnings growth in the years to come, making it a solid stock for investors seeking to accelerate retirement savings.
North West stock
Another dependable Canadian stock that could strengthen your retirement portfolio is North West Company (TSX: NWC). This Winnipeg-based retailer sells food and everyday essentials across northern Canada, Alaska, the Caribbean, and the South Pacific.
After rallying 21% over the last year, NWC stock currently trades at $55.96 per share with a market cap of $2.7 billion. It also offers a 3% annualized dividend yield.
Its revenue rose 5.4% YoY in the second quarter, backed by a 6.7% increase in same-store sales, excluding foreign exchange impacts. More importantly, North West’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) climbed 5.6% YoY. However, higher fuel-related freight costs and operating expenses weighed on profitability.
To tackle these challenges, the company is improving merchandise selection, purchasing efficiency, and productivity through its Next 100 strategy. These efforts could strengthen its margins over time.
With its essential retail business, ongoing efficiency improvements, and growing dividends, North West could be another attractive long-term stock to help build retirement wealth.