The average CPP pension in the country is about $640. While this number might look dismal to you, many people choose to start taking their pensions early when they are 60, which reduces the pension amount drastically.
But some pensioners do the smart thing and wait. But if you get to 70 before starting your CPP pensions, you can enhance your monthly cheque by almost 42%.
If that’s still not enough to meet your expenses, the time might be ripe to break open your nest eggs in RRSPs and TFSA. And one of the best ways to maximize your monthly retirement income is by investing your savings in stocks. CAE Inc. (TSX:CAE) (NYSE:CAE) and Enbridge (TSX:ENB)(NYSE:ENB) are two stocks that can help you in this regard.
A world-renowned training company
CAE is globally known for its aviation training simulations. The company has expanded its growth to other avenues as well, mostly in health care, defense, and security.
The company has a global reach, as it owns about 160 training locations in over 35 countries. The company trains hundreds of thousands of commercial and defense pilots and thousands of healthcare professionals every year.
This business model and direction appears to be working very well, as CAE grew its market value well over 150% in the past five years. This translates to a CAGR of 20.9%, which means you stand at a chance of earning all your investment back in five years.
If you invest $50,000, with a growth rate of 20.9%, you might earn about $10,450 by the next year in capital gains. So apart from your CPP pension, you can earn $871 a month by selling your stake in CAE.
And with a dividend yield of 1.11%, you will get about $46 a month through payouts. It could well increase in the future because CAE is also a Dividend Aristocrat with 12 years of increased payouts under its belt.
A dividend rock star
Enbridge has been a Dividend Aristocrat for quite some time now. The company has increased its payouts for 20 consecutive years. The yield is also one of the most generous among the Aristocrats. Currently, the company is offering a mouth-watering yield of 5.94%.
$50,000 in Enbridge will earn you about $247.5 a month in dividends, and the company’s history indicates that this number may grow in the future. This is a very stable way to augment your CPP pensions.
The market value of Enbridge is $55.58 per share at the time of writing. And according to some experts, Enbridge is still trading a bit under its potential fair value.
Together, $100,000 in the two companies can earn you a sum of over $1,100. This is a bit under the maximum amount you can earn through CPP pensions. So even if you’re earning the maximum, the two investments have the potential of doubling up your monthly retirement income.
So if you’re looking to augment your CPP pension, these two stocks should be on your radar.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge.