There’s no shortage of TFSA investment opportunities on the market right now. And finding those perfect investments today can unlock your retirement dreams tomorrow, assuming you know where to invest.
Here’s a look at some of those stocks that can unlock your retirement dreams.
Dream of being a landlord without a mortgage
Establishing a rental property income stream is one of the most sought-after retirement dreams for investors. Unfortunately, rising interest rates and surging down payment costs have pushed that dream out of reach for many.
And that’s where the appeal of RioCan Real Estate (TSX: REI.UN) offers a compelling and lower-risk alternative. RioCan is one of the largest REITs in Canada, with a portfolio of over 190 primarily retail properties.
In recent years, the REIT has shifted that mix over to mixed-use residential properties. Those residential properties comprise residential towers sitting atop several floors of retail. The properties are also located along transit lines in major metro areas where demand is high.
The result is a well-diversified investment that is invested across hundreds of units rather than a single property. Even better, investors do not need to worry about gathering rent, providing maintenance, or paying a mortgage.
Perhaps best of all, just like a rental property, RioCan pays out a monthly distribution. As of the time of writing, the yield works out to an impressive 5.56%. This means that a $20,000 investment, which is far less than a downpayment, will earn a monthly income of just over $90.
And keep in mind that if it’s part of your TFSA portfolio, that income (or reinvestment if you’re not there yet) is tax-free.
Dream of being on the ground floor of the renewable energy revolution
Renewable energy remains one of the most intriguing and lucrative long-term investments available to investors right now. While traditional utilities are transitioning over to renewables at considerable expense, renewable energy stocks like TransAlta Renewables (TSX: RNW) are already there.
TransAlta boasts a portfolio of renewable energy facilities located across Canada, the U.S., and Australia. And like its fossil-fuel-burning peers, those facilities are backed by lucrative long-term regulated contracts.
Those contracts provide a stable and recurring revenue stream, while also allowing TransAlta to pay out a generous dividend. As of the time of writing, that dividend works out to an insane 8.2%, handily making it one of the better-paying dividends on the market.
Also worth noting is that TransAlta pays out on a monthly basis. This means that a $20,000 allocation in your TFSA can earn just over $130 each month.
Dream of being part of something much bigger
Canada’s big banks are often cited as some of the best long-term investments. And Bank of Montreal (TSX: BMO) is an intriguing option for investors to consider right now.
BMO is the oldest of the big banks and has been paying out generous dividends without fail for nearly two centuries. Today that yield works out to an impressive 4.95%.
This means that investors with $30,000 to invest in BMO as part of their TFSA can expect to generate an income just shy of $1,500. Keep in mind that investors not ready to draw on that income yet can reinvest it, allowing it to grow further.
Turning to growth, BMO completed the US$16.3 billion purchase of California-based Bank of the West earlier this year. The deal adds hundreds of new branches to BMO’s U.S. network, which is now among one of the largest lenders in the lucrative U.S. market.
The deal also helps to diversify BMO’s growing portfolio further outside of Canada, which is a concern for some of its big bank peers.
Unlock your retirement dreams today
Investments, no matter how defensive or big, are never without some risk. That’s why it’s important to always diversify your portfolio. That’s also why the three stocks mentioned above are great candidates to consider as part of a larger, well-diversified portfolio.
Buy them, hold them, and unlock your retirement dreams.
