Retirement should be a time to rest, enjoy freedom, and reap the rewards of decades of hard work. But comfort in retirement does not happen by chance. It takes careful planning and smart financial decisions made early enough.
This is especially true in Nigeria, where inflation has consistently eroded the value of savings. To retire comfortably, your investments must grow faster than inflation or your money will gradually lose its purchasing power.
Unfortunately, many retirees discover too late that their pension savings alone cannot sustain their lifestyle.
The Pension Reality Check
Consider this example:
A retiree with N20 million in a Retirement Savings Account (RSA) at 65 may receive around N160,000 to N180,000 monthly under Programmed Withdrawal or slightly less under a Life Annuity.
That translates to roughly N5,000 to N6,000 per day. With today’s cost of food, healthcare, transportation, and utilities, that amount barely covers the basics.
The bigger challenge is that very few workers even accumulate N20 million over their career. An employee earning N100,000 to N250,000 monthly may only save N7 to N15 million after 25 to 30 years. That results in a retirement income of just N50,000 to N120,000 per month.
Clearly, relying only on pension contributions is not enough. Building a smart investment portfolio is no longer optional.
Why Dividend Stocks Stand Out
Traditional “safe” assets like treasury bills and bonds often deliver returns below inflation. That means your real wealth still shrinks over time.
Equities offer a better chance of beating inflation. For retirement planning, dividend stocks are particularly powerful. They provide steady cash flow in the form of dividends and can also appreciate in value.
On the Nigerian Exchange (NGX), more than 30 companies have paid dividends consistently for at least seven years. Many of them also posted share price gains above 40% in 2024, easily beating inflation. By August 2025, nearly 98 listed stocks had delivered inflation-beating returns, with over 20 maintaining a consistent dividend history for five years or more.
Focus on Quality, Not Just Yield
Not all dividend stocks are created equal. A high yield today is meaningless if the company cannot sustain payouts in the future.
Smart investors focus on free cash flow, dividend payout ratios, earnings stability, and growth potential. These indicators help identify companies that can keep paying or even grow dividends over time.
Dividend Champions to Watch
Take Dangote Cement, for instance. In the last five years, it generated nearly N2 trillion in free cash flow, with profit growth of 13% annually. That explains why it distributed N30 per share as dividends in 2023 and 2024.
Banking giants are another reliable source of dividends. For example:
- Zenith Bank recorded N2.4 trillion in profits over five years, growing 35% annually.
- UBA posted N1.77 trillion, growing at an impressive 48% CAGR.
- Fidelity Bank grew profits at a remarkable 59.8%, outpacing most peers.
- GTCO generated N2.1 trillion with a 38% growth rate.
- Access Holdings delivered N1.68 trillion, growing at 43%.
Beyond banking, Seplat Energy stands out for paying quarterly dividends and generating dollar-based revenues a hedge against naira depreciation.
Agricultural players like Okomu Oil and Presco also reward shareholders with steady cash flows and consistent payouts, offering diversification outside the financial sector.
Even lesser-known companies like Beta Glass are worth watching. Over five years, it generated N34 billion in profits and delivered strong share price growth in 2025, making it attractive for both income and capital gains.
Building Your Retirement Portfolio
The goal is simple: create a portfolio that delivers reliable income and preserves purchasing power. Spread your investments across sectors, focus on businesses with strong fundamentals, and reinvest dividends where possible.
With the right mix of dividend-paying stocks, you can enjoy a retirement that is financially secure, inflation-proof, and stress-free.
