Last week, I discussed the difference between a retirement portfolio and a retiree’s portfolio. There is a big difference between investing for the future and withdrawing from this investment to live. I put my portfolio on fast forward and took a look at trades I would do to make the switch toward a retirement portfolio and a retiree’s portfolio. I was quite surprised to see how different both portfolios were.
The point is that you must think about withdrawing money once you retire. Therefore, you need cash ready to be withdrawn, and you need a strong portfolio paying a healthy dividend to support your lifestyle as much as possible. In a perfect world, we would all live off our dividend and give this well-built nest egg to our children. But the reality is otherwise.
My top 10 Canadian “Retirement†Stocks
To conclude this reflection on portfolio management, I’ve done some research and handpicked my top 10 Canadian dividend stocks for retirees. I could have selected the 6 big banks, 3 telecoms, and 1 energy stock, and I would have been done within seconds. I’m actually starting with 2 banks and 2 telecoms, but I tried my best to build a solid portfolio with more options.
Royal Bank (RY.TO)(RY) 3.61% yield
I know, I didn’t want to take only banks, but a Canadian dividend portfolio isn’t one without a few banks, eh? Over the past 5 years, RY did well because of its smaller divisions acting as growth vectors. The insurance, wealth management, and capital markets pushed RY revenue. Royal bank also made huge efforts into diversifying its activities outside Canada. Canadian banks are protected by federal regulations, but this limits their growth. Having a foot outside of the country helps RY to reduce risk and to improve growth potential.
National Bank (NA.TO)(NTIOF) 3.88% yield
I promise this is the last bank of the group! I just couldn’t ignore this fast-growing regional bank! NA aimed at capital market and wealth management to support its growth. Since NA is heavily concentrated in Quebec, it concluded deals to do credit for investing and insurance firms under the Power Corporation (POW). Branches are currently going through a major transformation with new concepts and enhanced technology to serve clients. While awaiting the results, it seems wise to invest in digital features to reach out to the millennials and improve efficiency.
