With the cost of living being high, it is fairly common to not have any retirement savings at age 40. The good news is that there is still time to build a surprisingly large retirement nest egg, with the FTSE 100 currently offering numerous buying opportunities that could help you in this regard.
Certainly, there are risks such as Brexit and a global trade war ahead in the short run. But the index’s track record shows that it has always recovered from short-term difficulties to post new record highs.
With that in mind, here are two FTSE 100 shares that could be worth buying today. They may offer growth potential that helps you to retire on a rising passive income.
The recent fourth-quarter trading statement released by Next (LSE: NXT) showed that its performance has been strong, despite weak consumer confidence. Its full-price sales to 28 December 2019 increased by 5.2%, which was 1.1% ahead of its own forecast. This contributed to an increase of 3.9% in sales for the full year, which highlights the success of the company’s overall strategy.
A solid performance in the fourth quarter meant that the company upgraded its profit forecast for the full year. This should not be a major surprise to investors, since Next has a sound track record of outperforming the wider retail sector. For example, after a disappointing period during the financial crisis, it was able to post year-on-year profit growth that bucked the wider retail trend.
Looking ahead, the company’s price-to-earnings (P/E) ratio of 14.9 suggests that it offers fair value for money at the present time. Its improving growth outlook could mean that now is the right time to buy it, with it having the potential to beat the performance of the wider retail sector.
Education specialist Pearson (LSE: PSON) has experienced a challenging period in recent months. Its latest update showed that its US Higher Education Courseware business has been weaker than expected in what was a key period. As such, its near-term financial performance could be at the lower end of previous guidance.
A strategy change could be ahead for the business, as it is set to replace its current CEO in 2020. This may create a degree of uncertainty in the near term, but this appears to have been factored-in by investors via a relatively low valuation. For example, the stock currently trades on a P/E ratio of around 11.8. This suggests that it offers a wide margin of safety.
With Pearson continuing to make progress on its simplification strategy that includes cost reductions, it may offer improving financial prospects in the long run. Therefore, it may be a stock that delivers high returns for long-term investors as it gradually implements an improved strategy over the coming years.
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With shares still changing hands at what he believes is an undemanding valuation, now could be the ideal time for patient, income-seeking investors to start building a long-term holding.
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Peter Stephens has no position in any of the shares mentioned. The Motley Fool UK has recommended Pearson. 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.