2 Top TSX Stocks for Retirees

If Canadian retirees were to fill the shortfall of the CPP and OAS, their other income should be for life too. Royal Bank of Canada and BCE stock are blue-chip assets that can deliver pension-like income.

The challenge for new retirees is adjusting to a laid-back atmosphere from a pressure-laden work environment. However, in either stage, you need ample financial resources to sustain your lifestyle. Retirement is not as enjoyable if you rely only on the Canada Pension Plan (CPP) and Old Age Security (OAS).

In Royal Bank of Canada’s (TSX: RY)(NYSE: RY) Financial Independence in Retirement poll in March 2021, 47% of the respondents don’t think they have saved enough for retirement. Furthermore, 38% say they’re paying attention to cash flow the most during the pandemic.

Current retirees have the same concern, as many admit not prioritizing retirement planning. Future retirees are fortunate, because the global pandemic has taught valuable lessons on financial security. When you retire, the primary lookout is the general state of your finances.

If the CPP and OAS are inadequate, the solution to fill the income gap is to save and invest. Purchase shares of RBC and BCE (TSX: BCE)(NYSE: BCE), like most prospective retirees do to boost retirement income.

Too big to fall

The probability is high that a Canadian with a stock portfolio has the country’s most valuable brand as a core holding. RBC is the second-largest publicly listed company on the TSX after Shopify. It has proven time and again how formidable it is to endure the harshest recessions and economic downturns. This $179.6 billion bank dominates and is too big to fall.

It didn’t matter if RBC had to suffer 10% and 54% drops in revenue and net income in Q2 fiscal 2020. Management saw it necessary to increase the bank’s provision for credit losses (PCLs) by 542% to $2.8 billion. RBC’s CEO David McKay said, “We will continue to leverage our strong balance sheet, our leading scale, and distribution capabilities across our franchises to prudently and efficiently support our clients.”

Fast forward to Q2 fiscal 2021 (quarter ended April 30, 2021), and RBC’s war chest is even bigger. Canada’s economy held steady with no reported deterioration in the bank’s loan portfolio. For the quarter, net income rose 166% versus Q2 fiscal 2020, while PCLs fell to $96 million.

On the TSX, RBC investors have enjoyed a 23% year-to-date gain. At $126.03 per share, the dividend yield is 3.43%. The bank has $9.9 billion in excess CET1 capital, so a dividend increase is possible once banks receive the green light to proceed.

Industry dominance

BCE is a no-nonsense investment if the gauge is dividend longevity. The $55.43 billion telecom giant hasn’t missed a dividend payment for nearly 140 consecutive years. At $61.28 per share, the year-to-date gain is 16%. However, the dividend yield is a high of 5.71%.

The federal government fully supports the infrastructure development. Early this year, BCE announced its plan to invest $1.7 billion more to accelerate the rollout of broadband fibre, 5G, and rural networks over the next two years. BCE also spends around $4 billion every year for broadband networks expansion.

BCE’s communication network infrastructure rules in Atlantic Canada. Glen LeBlanc, Bell’s vice-chair Atlantic, said people there should be ready for all the possibilities of the next generation of mobile digital communications.

Blue-chip holdings

Retirees need more than the CPP and OAS to live comfortably in retirement. Industry leaders RBC and BCE are blue-chip companies you can depend on for pension-like income.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.

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