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3 Ways to Get Your TFSA to $1,000,000

If you’re looking to save for retirement and haven’t started putting money aside, the good news is that it’s never too late to start. Once you begin saving money, you can start building up that nest egg and could even start buying stocks.

There’s no one way to save for retirement and you can make up for lost time by either being more aggressive in your investing strategy or simply saving more and having more money to put into your investments.

Below, I’ll look at three different ways that you can build up your TFSA and reach the $1,000,000 mark for retirement.

Investing if you haven’t saved anything

Once you start saving cash you can start investing. One way that you can start building your portfolio up is by investing every year into dividend stocks, or even growth stocks for that matter.

While you could invest more frequently, for the purpose of minimizing fees and also to decrease the chance you’ll be flagged as a day trader by the Canada Revenue Agency, buying once a year is definitely a safe approach and it will be easiest for those that haven’t put aside anything just yet.

This approach will definitely take some discipline, but it will more than pay off over the long term.

Investing a lump sum

If you’ve just sold a house or gotten a windfall of money, investing all that cash could put you in a great position to save for retirement, even if you aren’t able to contribute more money every year.

This approach, however, requires that you have a decent amount of money to start with. However, it too could definitely get you to $1,000,000 if you have enough investing years left.

Combining the two approach

In an ideal world, you’re able to contribute both a lump sum and invest every year, as that will definitely accelerate your portfolio’s growth over time. Obviously, the more that’s invested, the more likely that your portfolio will be able to achieve significant growth over the years.

Ultimately, investors will have to make the decision that makes the most sense in saving for retirement as any of these three strategies can help investors generate significant returns over the long term.

Selecting the right dividend stock

What might be the most important decision, however, is determining which stock(s) to invest in with all that money.

Algonquin Power & Utilities Corp (TSX:AQN)(NYSE:AQN) is a great example of a stock that has it all and that investors should consider.

For one, it has a very good dividend rate of over 3%. While it may be a modest amount, investors need to remember that the dividend has grown over the years and that yield that you’d be earning today would likely be higher years from now, as long as you hold on to the investment.

But dividend growth stocks aren’t uncommon, and what makes Algonquin stand out even more is that it’s been a great growth stock as well.

In three years, the company has seen its sales more than double as it has expanded its reach through acquisitions. And with sales reaching $1.6 billion in its most recent fiscal year, the company is still nowhere near peaking and it has many opportunities to grow in North America.

In five years, Algonquin’s share price has risen more than doubled, which is in addition to the dividend income that it has provided shareholders with over that time.

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Fool contributor David Jagielski has no position in any of the stocks mentioned.

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