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Forget the State Pension! I think this 5.5% yield could help you get rich and retire early

Can you imagine having to live on £168.60 per week? No, neither can I. Yet that’s exactly what millions of British pensioners find themselves having to do, reflecting a State Pension that leaves a whole army of people living in what some experts describe as ‘severe poverty.’

What’s just as worrying for people who are yet to reach pension age is that the point at which one can claim the state benefit is getting further and further away. Government has recently taken steps to raise the State Pension age (to 66 years by next October and to 67 by 2028) but calls to raise it even more continue to grow. One ex-minister even suggested hiking the threshold to 75 years!

The window to big returns

It’s obvious, then, that sitting back and praying that the government will take care of you in your retirement is a very dangerous game. It’s time to get busy building a nest egg for your later years. And fortunately, global stock markets are chock-full of great dividend shares to help you make the sort of money to offset the impact of a low State Pension or, for the more ambitious, to allow us to get rich and reward ourselves with an early retirement.

One such share I think could help you achieve these goals is Tyman (LSE: TYMN). This particular share has a great record of lifting annual dividends (up 50% in the past five years alone) and is backed to keep raising them for the foreseeable future.

Current City forecasts suggest a 12.5p per share reward for 2019, up from 12p last year, as well as a 13.2p payment for 2020. And these figures create blistering yields of 5.2% and 5.5% respectively.

Long-term gain > short-term pain

It’s fair to say that Tyman, which manufactures an assortment of door and window components, isn’t having the best of things right now, however. In May it said that trading has been “slightly below” expectations in the year to date because of tough conditions in the US and Canadian homes markets and that like-for-like revenue growth had been flat. It seems as if the trading landscape is likely to remain difficult too, certainly judging by recent housing sector data from North America.

I would urge investors, however, to look past this near-term turbulence and think of the bigger picture. Its robust position in the US will offer an abundance of profit-making opportunities once the cycle improves. Meanwhile, its frenzied activity on the M&A front, both within the world’s biggest economy and other major global territories, also bodes well for the future. Indeed, the success of acquisitions like Ashland, Giesse and Bilco made in recent years continues to blast past all prior expectations.

Despite a flurry of recent buying activity, Tyman’s shares remain ultra-cheap, the firm trading on a forward P/E ratio of just 8.6 times. At these levels I reckon the firm’s a terrific pick for long-term dividend investors.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.