Over 50 and Worried About Retirement? Here’s How You Can Get to $1,000,000 by Age 65

Waste Connections Inc (TSX:WCN)(NYSE:WCN) has proven to be a good buy in recent years and could be a great way for investors to help accelerate their savings.

| More on:

For Baby Boomers, Retirement is coming soon (many are already there), which means that saving for retirement is a big issue. In a recent poll, Royal Bank of Canada found that many people saving for retirement were going to fall short of their goals.

A common goal for man people was to have around $1,000,000 by the time they retire. The average shortfall was more than $275,000.

If you’re one of those people who’s worried and you’re looking for a way to ramp up your savings over the next five plus years, I’ll show you how you can do so and reach your goal of $1,000,000 without having to take on significant risk.

One common strategy is to load up on dividend stocks and rely on that income to help your portfolio grow over time. There’s nothing wrong with investing in blue chip dividend stocks, as they’ll be able to provide you with safety and good sources of recurring income.

However, if you’re looking for better returns, you’ll need a more aggressive strategy — one that moves away from dividend stocks in favour of growth stocks. It’s important to note that while you’ll be in a better position to earn higher returns, you might be at a bit more risk as well.

The good news is that there are many good growth stocks to invest in that aren’t going to jeopardize your savings — and certainly not much more than the markets as a whole will anyway.

A stock like Waste Connections Inc (TSX:WCN)(NYSE:WCN), which operates in a very stable industry that has seen strong growth over the years, is a great example.

With the stock up more than 230% over the past five years, that equates to a compounded annual growth rate of over 18%.

The past doesn’t predict the future, but let’s assume that the stock will continue to see strong growth and rise at 15% per year for the foreseeable future.

If you’ve got $500,000 in your savings already, here’s what your investment could look like over the next 10 years, assuming Waste Connections can continue growing in value at that rate:

Year Portfolio
1 $575,000.00
2 $661,250.00
3 $760,437.50
4 $874,503.13
5 $1,005,678.59
6 $1,156,530.38
7 $1,330,009.94
8 $1,529,511.43
9 $1,758,938.15
10 $2,022,778.87

As you can see, even if you’re far away from your retirement goal, investing in a growth stock like Waste Connections could drastically improve your portfolio’s value and get it to $1,000,000 even within five years.

And if you’ve got 10 years left to invest, then your savings could double to $2,000,000.

Takeaway for investors

The main takeaway for individuals saving for retirement isn’t that Waste Connections is a sure thing to rise 15% every year and that you should put all your savings into that right now.

Rather, if you adjust your strategy and focus on growth over dividends, you’ll have better odds of growing your portfolio’s value in the short term.

There are many good tech stocks out there that could certainly help fit the same criteria and achieve significant returns in a short amount of time. There will be some added risk because trade wars, tariffs and many issues could impact a stock’s overall returns.

However, if you’re willing to take on some of that uncertainty, you could be rewarded very well for it if the markets continue performing well.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor David Jagielski has no position in any of the stocks mentioned.

More on Investing

ETF stands for Exchange Traded Fund
Investing

Here’s the Average TFSA Balance at Age 54 in Canada

Here are two ways to optimize your TFSA for either growth or income via ETFs.

Read more »

oil and gas pipeline
Energy Stocks

Where Will Enbridge Stock Be in 3 Years?

After 29 straight years of increasing its dividend and a current yield of 6%, here's why Enbridge is one of…

Read more »

An investor uses a tablet
Tech Stocks

Canadian Tech Stocks to Buy Now for Future Gains

Not all tech stocks are created equal. In fact, these three are valuable options every investor should consider.

Read more »

calculate and analyze stock
Dividend Stocks

This 5.5% Dividend Stock Pays Cash Every Single Month!

This REIT may offer monthly dividends, but don't forget about the potential returns in the growth industry its involved with.

Read more »

concept of real estate evaluation
Stocks for Beginners

2 No-Brainer Real Estate Stocks to Buy Right Now for Less Than $1,000

These two real estate sector-focused stocks have the potential to deliver strong returns on your investments in the coming years.

Read more »

Pumpjack in Alberta Canada
Energy Stocks

Is Enbridge Stock a Buy, Sell, or Hold for 2025?

Enbridge stock just hit a multi-year high.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

How to Use Your TFSA to Earn up to $6,000 Per Year in Tax-Free Passive Income

A high return doesn't mean you have to make a high investment -- or a risky one -- especially with…

Read more »

Asset Management
Stock Market

3 of the Best Canadian Stocks to Buy Right Now

Are you looking for stocks that could be a major bargain right now? These three Canadian stocks could provide some…

Read more »