No pension at 50?I hope these he builds a retirement life with his FTSE dividend stocks of two world class

Retirement


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FTSE100 Dividend stocks are a great source of income with world-class yields of up to 10% per year. If the UK stock market recovers, there will also be room for capital increases, with many easily outperforming Best Buy savings accounts today.

If I were 50, had no pension, and were willing to take the additional risk of investing directly in stocks, I would quickly lose heart. Investing in dividend stocks is a long-term game, but at this stage he’s still 17-18 years away from retirement, so he still has plenty of time to play.

I plan to reinvest all of my dividends into my portfolio for today’s growth and withdraw them later as income when needed. I’d like to start with these two top income stocks.

this seems like a good starting point

Insurance companies and asset managers Legal/general group (LSE: LGEN) is now my favorite dividend stock. It is expected to pay investors a blockbuster yield of 8.8% next year, making it one of the largest in the index.

Such very high yields can be an indication that a company is in financial trouble, as falling stock prices automatically raise yields. And it’s true that L&G stock has performed poorly, dropping 14.97% in five years and 8% in 12 months.

Affected by recent stock market volatility, assets under management and client inflows have declined. With inflation still high, uncertainty is likely to linger, but at some point the market will turn around and, with any luck, L&G will turn to support again.

Operating profit rose 12% to £2.52 billion last year, still profitable and with good Solvency II coverage. Even better, despite all the 2022 concerns, management increased its all-important dividend last year by 5%. Hopefully there will be more of that as time goes on.

One of the Safer Income Stocks

I would like to combine L&G, the UK’s largest power transmission and distribution specialist, with what I have always considered the safest FTSE 100 dividend stock. national grid (LSE: NG).

The company has operations in both the UK and the northeastern US and aims to be a low-risk business that delivers stable dividends and share price growth. Capital is always at risk when buying stocks directly, and I feel it’s even less risky in this case.

National Grid’s stock never jumps, but it’s up 27.08% over the past five years and 2% over the past 12 months.

Unlike L&G, it doesn’t come at a bargain valuation, but in practice it rarely does. The price/earnings ratio of 16.4x is well priced, reflecting relatively low risk. It currently generates a stable income of 5.3% per annum.

Management must invest heavily in maintaining and developing the transmission network while funding the transition to clean energy. Nonetheless, the company’s regulated profit rose a steady 15% to £4.58 billion last year.

This is just a starting point. If I were to start building a stock portfolio at age 50, I would want to diversify across different stocks and sectors. The FTSE 100 has many other good dividend stocks. Many look very cheap after the recent plunge.

The post No pension at age 50? I would like to build my retirement life with these two world class his FTSE dividend stocks, first published in the Motley Fool UK Edition.

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Harvey Jones works for Legal & General Group Plc. The Motley Fool UK has no positions in any of the stocks mentioned. The views expressed about the companies mentioned in this article are those of the writers and may differ from the official recommendations we make on subscription services such as Share Advisor, Hidden Winners and Pro. At the Motley Fool, we believe that considering diverse insights makes us a better investor.

Motley Fool UK 2023



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