Over 50 and Worried About Retirement? These Are the Dividends to Buy

If you’re over 50 and aren’t sure if you’re still able to retire according to your original schedule after the recent wave of inflation we’ve been through, know that you are not alone. Indeed, it’s a tough time for retirees and those soon to be after the relentless rising costs of a broad range of necessities. Though inflation isn’t gone for good, it is starting to get under control. Last week, it was revealed that the August CPI number was the lowest (at 0.2%) since February 2021. That’s some encouraging news, especially if the disinflation trend continues to year’s end.

However, past price hikes will still live with us unless disinflation is around the corner. And with that, we’ll need to budget accordingly for what could be permanently elevated rents and prices at the grocery store. If fixed income had helped you retire earlier in 2019, you may have felt just a bit discouraged that the same monthly income wouldn’t grant you quite as much purchasing power. Though periods of deflation don’t happen under normal conditions, I certainly would not rule it out.

If you’ve shopped at Walmart (NYSE: WMT | WMT Price Prediction) lately, you’ll know that prices on numerous food items and essentials are falling. Additionally, fast food firms are cutting costs, thanks in part to McDonald’s (NYSE: MCD) and its impressive $5 meal deal, which will now outlast the summer.

All considered, soon-to-be retirees can still retire a bit sooner, especially if they can make the right moves while the risk-free rate (and stock dividend yields) are on the high side. These dividend stocks may just be able to help you put your retirement worries to rest.

Key Points About This Article

• Retirees don’t need to worry as inflation winds down and dividend stocks look to enjoy lower rates.
• McDonald’s and Verizon are great dividend plays that can help boost one’s retirement income.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

McDonald’s

McDonald’s stock is closing in on new highs again after surging more than 20% since its July lows. Undoubtedly, the summer of meal deals seems to win back many diners. Although several fast-food rivals have copied McDonald’s with aggressive discount promos of their own, I’d argue that none of them communicate the value they’re offering as well as McDonald’s.

Last Friday, MCD shares inched up 1.43% on news that its $5 meal deal would be extended (yet again). This time, the deal will last through December. If economic headwinds and disinflation (or perhaps deflation) prevail, the deal may stick around until next summer. In any case, McDonald’s should continue to win customers from rivals for the rest of the year by maintaining its popular deal, which consumers have eaten up.

In the new year, the key will be getting them to stick around via personalized offers via the loyalty app, new menu items (watch for the Big Arch to land), and social media-worthy collaborations with big-name celebs. Oh, and finding a way to bring back old mascots like Grimace or Birdie could help draw in young and nostalgic diners.

With an excellent, growing 2.3% dividend yield and a strategy that seems to be working again, MCD stock seems like a suitable choice for the soon-to-be-retired. Sure, the dividend’s not supersized, and the stock is flirting with new highs. That said, shares seem like a relatively low-cost defensive way to ride out a mild recession should one be around the corner.

Verizon

Verizon (NYSE:VZ) is another dividend stock that’s turned a corner over the past year. Shares of the beaten-down telecom firm are up 44% since their October 2023 depths, and they’re starting to pick up momentum. Looking ahead, Verizon seeks to be leaner as it eliminates close to 5,000 employees while making other moves to stage a turnaround in the stock.

Additionally, Verizon is in talks to buy fiber Frontier Communications in a potential $20 billion cash deal. Undoubtedly, such a deal could help boost Verizon’s fiber internet network as it aims to improve its footing versus some heavyhanded rivals. Though there are some synergies to be had, not all analysts are fans of the proposed deal. Most notably, Craig Moffett of MoffettNathanson thinks the idea is “absolutely atrocious.” Indeed, there’s a lofty premium involved with such a deal, making the potential value to be had highly uncertain.

Only time will tell if such a move will help jolt or weigh down VZ stock in its tracks. Regardless, the stock looks quite reasonably priced at 16.7 times trailing P/E. Undoubtedly, the main attraction continues to be the rich 6.18% dividend yield, which looks safer than a year ago when Verizon was on the ropes with shares at depths not seen in over a decade.