One way financial planners get clients to start preparing better for retirement is to have them imagine and describe how they will be living in retirement. Having that mental image of an older self makes it more real and gives people a clearer view of their goals.
What do you imagine your life will be like when you retire?
Having a dividend portfolio that's generating ample passive income can make a big difference in reaching your retirement goals. If you've started already, that's great. If not, then now is the best time to begin. Either way, these next three dividend stocks can help.
Macquarie Group Ltd (ASX: MQG) could be a good alternative to the big four bank stocks. The investment bank has raised earnings greatly through its experience investing in financial markets worldwide. The stock pays a healthy 4.3% partially franked yield and has steadily grown its full year dividend over the past three years. Macquarie Group could continue increasing earnings, so long-term dividend growth has huge potential.
Another good stock would be Automotive Holdings Group Ltd (ASX: AHE) with its great 5.8% fully franked yield. Grossed up, that becomes a whopping 8.28% yield for investors. The company is Australia's largest auto retailer, as well as the operator of the biggest refrigerated food transport and warehousing business. That gives good business diversity and can keep revenues steady and flowing. Forecast earnings growth is solid over the next few years. In addition, falling interest rates can drive more vehicle sales and leasing for this auto market leader.
I would also start looking at big name retail stocks like Harvey Norman Holdings Limited (ASX: HVN) and Super Retail Group Ltd (ASX: SUL). They aren't at extreme lows anymore, but they may have room to run if the combination of low interest rates, a weaker Aussie and lower petrol prices becomes a driver for consumer spending over the next 3-5 years. Super Retail Group and Harvey Norman offer a 4.7% and 5.4% fully franked yield, respectively. Potential share price gains could be a big plus for a long-term dividend portfolio.
