Secure Your TFSA for Retirement: Top Stocks to Invest in Now

Here’s how you can diversify your TFSA portfolio and hold quality stocks across multiple sectors, lowering overall risk.


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Canadians can look to leverage the benefits of the TFSA (Tax-Free Savings Account) to accelerate their retirement plans by a few years. You can hold a variety of qualified investments in this registered account, ranging from stocks and bonds to mutual funds and exchange-traded funds. Additionally, any returns in the form of dividends and capital gains generated in the account are exempt from taxes.

Introduced in 2009, the cumulative contribution room for the TFSA has increased to $88,000 in 2023. Here are a few stocks you can invest in your TFSA account in June 2023.

Tech stocks such as Apple and Microsoft

Yes, you can hold U.S. stocks in a TFSA. The United States is the world’s largest economy providing you with exposure to some of the best companies, such as Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT).

Apple is the largest company globally in terms of market cap. While the iPhone still accounts for a majority of sales, Apple has several other products that generate billions of dollars annually. For example, it is the market leader in the wearables space on the back of products such as the Apple Watch and the AirPod.

Apple’s Services business is now the second largest segment for the company, which includes revenue from the App Store, Apple Care, Apple Music, and Apple TV+.

Similarly, Microsoft also enjoys a wide economic moat and is one of the major players in growth verticals such as public cloud, gaming, enterprise software, and gaming. Its US$10 billion investment in Open AI also provides Microsoft with a first-mover advantage in the artificial intelligence segment.

Both Apple and Microsoft pay shareholders a dividend as well. But investors should note that the IRS (Internal Revenue Service) will levy a 15% withholding tax on any dividends earned on U.S. stocks. Alternatively, any capital gains generated from investing in U.S. stocks are tax-free if held in a TFSA.

High dividend TSX stocks

Canadians can also consider investing in high-dividend cyclical stocks such as Toronto-Dominion Bank (TSX:TD)and Enbridge (TSX:ENB). The banking crisis south of the border and falling oil prices have dragged TD stock and ENB stock lower in recent months. But the pullback has also increased the dividend yields of the two stocks, making them attractive to value and income-seeking investors.

TD Bank and other big Canadian banks are far more conservative compared to their peers in the U.S. This risk-adjusted approach has allowed TD Bank to maintain dividend payouts across business cycles. It now offers you a dividend yield of almost 5%.

Enbridge, too, is part of the highly cyclical energy sector. But its cash flows are regulated and backed by long-term contracts enabling the company to increase dividends for 28 consecutive years. It currently offers investors a yield of over 7%.

Invest in the Brookfield portfolio of companies

TFSA investors should keep companies such as Brookfield Renewable (TSX:BEP.UN) and Brookfield Infrastructure (TSX:BIP.UN) on their watchlists. These two TSX stocks continue to grow at an enviable rate while providing investors with a tasty dividend yield.

While BEP stock is up 389%, BIP has returned 441% to shareholders in the last 10 years. Despite these outsized gains, the two TSX stocks offer investors a dividend yield of more than 4%.

The Foolish takeaway

TFSA investors basically need to invest in quality companies with strong fundamentals, wide economic moats, and pricing power. Further, you need to diversify your TFSA portfolio by holding a basket of stocks across sectors. By doing so, you can lower overall risk.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Aditya Raghunath has positions in Brookfield Renewable Partners and Enbridge. The Motley Fool recommends Apple, Brookfield Infrastructure Partners, Brookfield Renewable Partners, Enbridge, and Microsoft. The Motley Fool has a disclosure policy.

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