Retirement planning can feel like a daunting task. Yet, for a 35-year-old Canadian looking to retire by 65, it’s not too late to catch up and set yourself on the right path. The question of how much you should have saved by now varies based on lifestyle goals, but financial experts often suggest having the equivalent of one to two times your annual salary saved by age 35.
For the average Canadian earning around $60,000, this means you should aim to have somewhere between $60,000 and $120,000 in your Tax-Free Savings Account (TFSA) or other savings accounts by this stage. While these numbers might seem intimidating, there are powerful tools available to help you close any gaps, such as investing in stocks like Brookfield Corporation (TSX:BN).
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Brookfield
Brookfield stock is a giant in the asset management space, with interests in renewable energy, infrastructure, and real estate. These sectors are vital for economic growth and provide a diversified base for long-term investment. The company has a market cap of $125.94 billion, cementing its status as a blue-chip stock on the TSX. Its financials reflect strength, with annual revenue of $97.66 billion and earnings before interest, taxes, depreciation, and amortization (EBITDA) of $27.3 billion, thus showing its ability to generate significant operational earnings.
Brookfield’s recent performance highlights its reliability. Over the past year, the stock has ranged from a low of $51.15 to a high of $87.65, delivering significant returns for those who bought during market dips. Its current price offers an attractive entry point for long-term investors, particularly given its forward price-to-earnings (P/E) ratio of 15.67. This suggests the stock is fairly valued relative to its earnings potential, making it an ideal candidate for those looking to balance growth and stability.
Earnings growth has faced some challenges, with quarterly revenue growth down 0.8% year over year and earnings per share (EPS) at $0.66. However, these numbers don’t tell the full story. Brookfield’s strength lies in its diversified revenue streams and its ability to adapt to market conditions. Its forward-looking strategies in renewable energy and infrastructure are especially promising — especially given global trends toward decarbonization and sustainable development.
What to expect
Brookfield’s dividend yield is modest at 0.53%, but its payout ratio of 52.63% suggests room for growth in the future. Dividends may seem small compared to other stocks, but when combined with the stock’s growth potential, these provide an additional layer of compounding. For those aiming to build retirement income, reinvesting dividends can significantly boost your overall returns over the long term.
The company’s future outlook is bolstered by its investments in sectors that are expected to see significant growth in the coming decades. For example, Brookfield’s focus on renewable energy aligns with global policies encouraging green energy solutions. Its infrastructure investments provide exposure to assets that generate stable, long-term cash flows. This is particularly attractive for those nearing retirement and seeking reliable income.
What about the risks? Brookfield carries a high debt load, with $247.54 billion in total debt, resulting in a debt-to-equity ratio of 147.73%. While this might sound alarming, it’s worth noting that much of this debt is tied to infrastructure and real estate assets that generate predictable cash flows. Moreover, Brookfield’s management has a proven track record of navigating debt markets effectively and maintaining operational efficiency.
Bottom line
So, how does this all come together for someone trying to catch up on their retirement savings? Brookfield provides an example of how investing in blue-chip stocks can act as a cornerstone for building wealth. By combining Brookfield’s growth potential with other dividend-paying or growth-oriented exchange-traded funds, you can create a balanced portfolio that capitalizes on market opportunities while managing risks.
So, while the average 35-year-old Canadian may feel behind in their retirement savings journey, investing in quality stocks like Brookfield Corporation can help bridge the gap. With its diversified business model, historical performance, and future growth potential, Brookfield represents a strong choice for those looking to maximize their TFSA contributions. The key is to start today, remain consistent, and take a long-term perspective. With patience and discipline, you can turn your TFSA into a powerful tool for achieving your retirement goals by 65 — and possibly sooner.
