With the State Pension age expected to rise to 68 in the next couple of decades, building a large nest egg during your working life could become increasingly important. After all, the State Pension currently stands at just £8,767 per year, which is unlikely to be sufficient for most people to enjoy financial freedom in older age.
As such, buying FTSE 100 growth shares could be a worthwhile move. Through delivering strong growth in the long run, they may be able to bring your retirement date a step closer.
With that in mind, here are two large-cap shares that could be worth buying right now in order to enhance your retirement savings prospects.
Burberry (LSE: BRBY) is in the process of implementing a revised strategy that will see it close underperforming stores and focus on its luxury offering. This is intended to strengthen its brand over the long run, while the company also focuses on enhancing the customer offering and reducing costs.
Alongside this, the company is seeking to more closely align itself with changing consumer tastes. For example, it is increasing its presence on social media, while aiming to become a more sustainable business.
So far, the changes being made to its business model appear to be having a positive impact on the company’s performance. Its recent updates have shown that it is on-track to deliver improving financial performance in the long run.
Of course, economic uncertainties in key markets such as China could cause a degree of volatility in the short run. However, with Burberry having a strong brand and set to become more efficient, its long-term financial prospects appear to be bright.
The recent decline in Shell’s (LSE: RDSB) share price could provide an investment opportunity. The oil and gas company’s shares have declined by around 12% in less than a month, with there being the potential for further uncertainty due to fears surrounding the prospects for the world economy.
While buying Shell shares now may produce paper losses in the short run if the oil price remains under pressure, history has shown that buying high-quality stocks during periods of market turbulence can lead to relatively high returns in the long run.
Since the stock trades on a price-to-earnings (P/E) ratio of 9.3, it appears to offer a wide margin of safety. In other words, its recent share price fall may factor in the risks that the business currently faces.
While capital growth may prove to be elusive over the near term, investors in Shell are set to benefit from a dividend yield of around 6.3%. Since the company’s dividend payments are covered 1.7 times by net profit, they appear to be sustainable.
As such, over the long run, the company’s total returns could help you to beat the State Pension and retire early.
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Peter Stephens owns shares of Royal Dutch Shell B. The Motley Fool UK has recommended Burberry. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.