There’s been no shortage of articles on The Motley Fool UK of late highlighting the perils of just relying on the State Pension to fund your retirement.
I don’t know about you, but I couldn’t survive on the paltry £164.35 per week that the current State Pension provides. Heck, many Britons may not even be able to draw on this small sum if their National Insurance contributions don’t match what the government demands.
As I mentioned before, the number of people setting themselves up for a fall is simply mind-blowing — around four out of every five people may not be investing enough for retirement, according to trade body The Pensions and Lifetime Savings Association.
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The issue is clearly too important to be kicked into the long grass, yet millions do just that, setting themselves up to spend their final years not enjoying the luxurious retirement that they had always envisaged, and even endangering their chances of being able to retire at all.
It’s never too late to start taking action, though, and fortunately there’s no shortage of top income shares that could fund your retirement. And that’s just inside the FTSE 100.
Take WPP (LSE: WPP), for example. The advertising giant may be under no little stress at the moment. Chief executive Martin Sorrell’s departure has led to big questions over the direction his former company will take, and his decision to launch a rival business — S4 Capital — will create a direct, not to mention vengeful, competitor in some of WPP’s major markets.
I’m not too concerned right now, though, the Footsie leviathan having the scale to beat off its new rival and keep its crown in the global ad market. In fact, the resignation of Sorrell may be the best thing to have happened to the firm amid signs that under him, it took its eye of the ball, contributing very much to the recent revenues cool-down. The new boardroom structure will address this immediately and give the company a much-needed kick up the backside.
I remain confident about WPP’s long-term outlook and reckon a forward P/E ratio of 10.4 times is an attractive level at which to jump in. A monster 4.9% dividend yield provides added incentive to invest in the firm today too.
Another Footsie beauty
I also believe AstraZeneca (LSE: AZN) has the tools to make you a fortune by the time you take off your work boots.
Yields at the firm may not be enough to blow your socks off. Indeed, with City brokers expecting the dividend to remain locked at 280 US cents per share through to the close of 2019, the yield stands at a chunky-if-unspectacular 3.5%.
That said, I am convinced that the pharmaceuticals play is in a strong position to ignite both earnings and dividends once again beyond this period. Efforts to reinvigorate its product pipeline have paid off handsomely, latest trading details showing a 75% sales rise across its new medicines between January and June.
What’s more, AstraZeneca’s attempts to harness rising medical investment in emerging markets is also a shrewd move for the years ahead (revenues from developing nations rose 14% in the first half).
A prospective earnings multiple of 23.6 times doesn’t make it cheap. But I believe AstraZeneca’s rapidly-improving sales outlook makes it worthy of such a tasty premium.
