Relying solely on the Canada Pension Plan (CPP) at age 70 can feel like a risky endeavour, even though delaying it that long maximizes your monthly payouts. When you defer CPP until 70, your payments increase by 42% compared to taking them at 65. While that boost might sound appealing, the reality is that CPP is designed to replace about 25–33% of the average Canadian's pre-retirement income. Not nearly enough to fund a fulfilling retirement for most people. Unless your lifestyle is incredibly modest, supplementing CPP with other savings, like those in a Registered Retirement Savings Plan (RRSP), or additional income streams, is essential.

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This is where investing can make a huge difference, especially if you choose the right assets. A company like Cargojet (TSX:CJT), for example, could be part of a strategy to build wealth over time. Cargojet, a leading air cargo provider in Canada, has demonstrated strong financial performance in recent quarters. In its third-quarter earnings for 2024, the company reported revenues of $245.6 million, marking a 14.8% year-over-year increase. Even more impressive was the net earnings growth, which soared to $29.7 million, up from $10.5 million in the same quarter the previous year. This kind of growth suggests that Cargojet is navigating market challenges well and positioning itself for continued success.

Cargojet has a solid reputation in the logistics industry, making it an appealing investment for those looking for long-term growth. With a price-to-earnings ratio of 19.1, Cargojet stock appears reasonably valued compared to some of its industry peers. For investors focused on value and growth, this could be an attractive combination.

One of Cargojet stock's standout features is its ability to maintain and grow revenue in challenging times. As e-commerce continues to expand, so does the need for fast, reliable logistics solutions, which plays to Cargojet's strengths. For the fourth quarter, the company has already forecasted higher revenues due to increased domestic demand and charter opportunities. This optimism is further supported by its ongoing fleet expansion efforts, including plans to acquire two additional Boeing 767-300 aircraft.

What to consider

However, potential investors should also consider Cargojet's debt levels. With a debt-to-equity ratio of 2.7, the company relies significantly on borrowing to fund its operations and growth. While this can magnify returns during periods of high profitability, it also introduces financial risk. For retirees or near-retirees, this level of leverage could be a red flag, suggesting the need to balance this stock with lower-risk investments.

Cargojet offers a dividend yield of around 1.2% which, while not particularly high, adds an element of passive income to an investment in the stock. This can be particularly appealing for those building a retirement portfolio. Furthermore, the company has been actively returning capital to shareholders, having repurchased $157 million worth of shares since late 2023. While its payout ratio is high, reflecting the company's focus on growth rather than income distribution, dividends and buybacks show commitment to rewarding investors.

Bottom line

For those building an RRSP alongside delayed CPP, a stock like Cargojet could complement a diversified portfolio aimed at generating growth. With its focus on logistics, Cargojet stock provides exposure to an industry with long-term tailwinds. That said, its debt and relatively low dividend yield mean it should be balanced with more stable income-producing investments.

To retire comfortably, relying on the CPP alone likely won't cut it. Investing strategically in growth companies like Cargojet stock alongside safer assets can help bridge the gap. Whether you're in your peak earning years or nearing retirement, diversifying your portfolio and focusing on both income and growth is the smartest way to ensure financial freedom in retirement. This multi-pronged approach allows you to take advantage of the CPP while bolstering your income through strategic investing.