Retirement’s edging a bit nearer by the day and, in preparation, I’m nudging my portfolio away from development and in direction of passive earnings.

I plan to generate that earnings by investing in a ramification high-quality dividend-paying blue-chip shares. These are corporations with sturdy stability sheets, dependable earnings and a historical past of rewarding shareholders. 

By fastidiously deciding on shares with sustainable and rising dividends, I’m hoping to construct a portfolio that ought to present a gradual stream of earnings for the remainder of my life. It’s not with out challenges although.

Can these FTSE 100 shares safe my retirement?

I’m unsure I’ve obtained the stability fairly proper. I’ve a ramification of FTSE 100 dividend shares, together with Lloyds Banking Group, Authorized & Basic Group, Unilever, M&G, BP, Taylor Wimpey and GSK. For my part, these corporations provide stable yields and potential long-term share price development as effectively. 

But I’m over-exposed to the monetary sector, with Lloyds, Authorized & Basic, and M&G all falling into this class. Oh, I additionally maintain insurer Phoenix Group Holdings. 

I’ve discovered FTSE 100 financials tough to withstand, given their ultra-high yields and low valuations, however I might need overdone it. To scale back danger and improve stability, I would like a bit extra diversification throughout totally different industries.

With that in thoughts, I just lately purchased oil and gasoline large BP (LSE: BP). Its shares appeared good worth, buying and selling at lower than six instances earnings. Its dividend yield of 5.36%’s additionally extremely engaging. Higher nonetheless, the board has been serving up a heap of share buybacks.

However I’ve worries. The BP share price has struggled as vitality costs retreat. It’s down 8% over one 12 months and seven% over 5.

Whereas long-term traders will nonetheless be comfortably forward, due to these dividends, it’s a disappointing exhibiting.

BP shares have jumped 7% within the final month as vitality costs decide up, however it faces a world of uncertainty proper now. What impression will Donald Trump’s tariffs have? How will UK windfall taxes and Labour vitality secretary Ed Miliband’s stance in direction of fossil fuels have an effect on the sector?

The BP share price isn’t my solely concern

We’re additionally ready to see what Trump will do about battle in Ukraine. If there’s a peace deal and gasoline begins flowing again into Europe, vitality costs may retreat once more. So may BP earnings.

My greatest fear is that BP can’t appear to determine how to deal with the renewables transition. Can it afford these share buyback and dividends whereas it pumps cash into inexperienced vitality?

Whereas I’m not promoting, these uncertainties imply I’ll be retaining an in depth eye on its efficiency earlier than rising my publicity.

BP isn’t the one FTSE 100 inventory with dangers. Each single firm I’ve talked about on this piece comes with dangers and rewards. That’s why diversification’s vital.

A few of these dangers could come by way of, others could not. However by investing in a ramification of high-yielding dividend shares, and permitting compounding to work its magic, I’m hopefully setting myself up for monetary safety and a rising second earnings for all times.