Retirement dreams vary per individual, although most have a bucket list or things to do in the golden years. Unfortunately, completing the activities on the list often end up as illusions because of financial constraints. You can only unlock those dreams if your retirement fund can cover your financial needs in the future.
All future retirees need a concrete plan; otherwise, all wishes in retirement turn into disappointments. The key to a comfortable and stress-free retirement is still saving and investing.
Canadians have incredible opportunities to build retirement wealth through the Tax-Free Savings Account (TFSA). Making regular contributions and maximizing the range of potential benefits of the tax-advantaged investment account should help you reach your financial goals.
TFSA users can choose the type of investments to hold, including dividend stocks. Dividend investing is a practical strategy because you can reinvest the dividends to accumulate more shares. Since all gains and interest in a TFSA are tax-free, money grows faster. The value of your nest egg should be substantial by the time you retire.
Investment opportunity #1
Canada Utilities (TSX:CU) is a fail-safe option for wealth builders and dividend earners. This utility stock is Canada’s only Dividend King, boasting 51 consecutive years of dividend increases. The awesome record assures consistent income streams, regardless of economic conditions.
The highly contracted and regulated earnings base of the $9.18 billion utility and energy infrastructure company is the foundation for sustaining its dividend-growth streak. From 2023 to 2025, Canadian Utilities will invest $3.3 billion in regulated utilities and $800 million in commercially secured energy infrastructure capital growth projects.
Management said the capital investment will further drive and boost cash flow and earnings while creating long-term shareholder value. Expanding the renewable business is also one of its strategic priorities. Canadian Utilities acquired high-quality renewable energy assets, including operating wind facilities (232 megawatts) and wind & solar development projects (1,500 megawatts).
Investors can expect dividends to grow alongside earnings from regulated and long-term contracted investments. In 2022, cash flow from operations increased 24.5% to $2.14 billion versus 2021. The near-term plan is to continue expansion in select markets like Australia and the Americas.
If you want to take advantage of this investment opportunity, CU trades at $34.04 per share and pays a lucrative 5.32% dividend.
Investment opportunity #2
Parkland (TSX:PKI) displays stability amid strong headwinds. At $34.03 per share, investors enjoy a market-beating 17.09 year-to-date return on top of the 4.03% dividend. The $5.97 billion fuel distributor and retailer is on track for a successful year in 2023. PKI is a Dividend Aristocrat owing to 10 consecutive years of dividend hikes.
In the first quarter (Q1) of 2023, sales & operating revenue and net earnings rose 7.2% and 40% to $8.15 billion and $77 million versus Q1 2022. Its president and chief executive officer Bob Espey said, “Our performance this quarter demonstrates our ability to execute on our strategy, capture synergies and deliver organic growth throughout our retail and commercial businesses.”
Map out a plan
Future retirees should take time to map out a plan as early as possible. Capitalizing on TFSA opportunities will also ensure retirement dreams are realizable, not mere illusions.,
