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How to Turn a $100,000 RRSP Investment Into $6,500 in Annual Retirement Income

Do you want to build your RRSP and set it up, so it will provide you with annual retirement income that will adequately replace your employment income when you retire? That is not as easy feat, but it is doable.

By putting as much as you can into your RRSP and keeping a long-term focus, you can do it.

So, we need to keep our eyes on dividend yields, on the sustainability of these dividends, and on the potential for increases going forward. Simply put, we need to focus on companies that have staying power, that are involved in industries benefiting from long-term secular growth trends, and that have clear competitive advantages.

With this in mind, let’s look at two stocks that can bring you closer to this dream.

With a $100,000 RRSP investment in these two stocks, you would receive $6,500 in retirement income. It’s a good start, and as you build your RRSP investments, this number would increase accordingly.

Chartwell Retirement Residences (TSX:CSH.UN)

Chartwell, the largest provider and owner of seniors housing communities from independent living to long-term care, has been benefiting from rising occupancy levels, as an uptick in demand has been accompanied by a stagnant supply of seniors housing.

With an almost 4% dividend yield, four consecutive years of cash distribution increases, and a quality portfolio of properties, Chartwell is a solid investment that is well positioned for the future.

The stock has been pretty stable in the last three years, trading in the $14-15 range, but it has a 46% five-year return, highlighting the growth potential and the stability of this investment. And all the while, investors have been receiving a monthly dividend that has been reliable and growing.

In its latest quarter, Chartwell reported a 6% increase in fund from operations, but the real story here is the long-term trend, as a doubling of people over the age of 75 in the next 20 years will provide a big boost to demand

Going forward, the company has a strong pipeline of opportunities to expand its portfolio of seniors housing developments as well as a plethora of opportunities to continue to expand its support services that are offered in house.

Northwest Healthcare Properties (TSX:NWH.UN)

The company offers a high-quality, global, diversified portfolio of healthcare real estate properties located throughout Canada, Brazil, Germany, Australia, and New Zealand. As such, Northwest stock offers investors exposure to the biggest demographic shift that much of the developed world is facing.

Northwest’s stock price has been a little more volatile than Chartwell’s, but that’s still not a lot. In the last three years, the stock has traded between $8 and above $11, and it has a five-year return of just over 10%. This, as well as its dividend yield of 7.32%, reflects the fact that Northwest has more leverage than its peers, which makes it slightly riskier.

But, considering everything, I still think that this stock offers investors a solid income stream that is pretty secure.

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Fool contributor Karen Thomas owns shares of NORTHWEST HEALTHCARE PPTYS REIT UNITS.  Northwest Healthcare is a recommendation of Stock Advisor Canada.

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