Retirees: Supplement Your CPP Payments With These 2 Dividend Stocks

The maximum Canada Pension Plan (CPP) a Canadian aged 65 can get in 2025 is $1,433 per month. CPP payments can substitute your basic needs but cannot sustain other expenses, especially medical expenses. And most retirees don’t even get this amount. They get an average monthly CPP payment of $808.14. Thankfully, you have a monthly Old Age Security (OAS) pension of $727.67 and a Guaranteed Income Supplement (GIS) of $1,086.88 if your annual income is below $22,056.

How can retirees supplement CPP payments?

However, you can supplement your CPP payments with passive income from investments. Most retirees who invested in Guaranteed Investment Certificate (GIC) to get a 5% interest might see their interest income fall as the Bank of Canada slashes interest rates. You could consider transferring some GIC investment to low-volatility, safe dividend stocks that can give you a 5% yield.

Two dividend stocks that can give retirees inflation-adjusted payments for years

The benefit of CPP is it’s inflation-adjusted adjusted and you are assured that the payment will come every month in any market cycle. Some dividend stocks can give you similar confidence with their low-risk business model.

CT REIT

CT REIT (TSX: CRT.UN) is Canadian Tire’s real estate arm. It owns, manages, and develops retail stores for Canadian Tire in return for rent. You may wonder then why not buy parent company stock? The difference in their company structure and business model makes CT REIT a more profitable investment.

Canadian Tire is a retailer of sports, hardware, and auto parts, and is affected by consumer demand, inventory holding, and other expenses. While the retailer grows its dividend at a faster rate, its dividend yield is slightly lower at 4.48%. The dividend growth is also unstable. While it is a good dividend stock for long-term growth, you need higher payments now as you are already retired.

CT REIT earns assured rent from Canadian Tire and grows it by 1.5% annually. It also develops new stores and enhances existing stores to earn higher rent. Around 99% of its debt is interest only with maturities spread over the years. The real estate investment trust (REIT) has the structure of a trust, wherein it distributes most of its earnings to unitholders to ensure it pays no tax on them. The tax is payable by the unitholder as per their tax bracket.

If you buy the CT REIT units in the Tax-Free Savings Account (TFSA), you pay no tax on the distributions. As TFSA withdrawals are tax-free, the 6.28% distribution yield does not impact your GIS and OAS, where the payout depends on your taxable income.

Enbridge stock

Enbridge (TSX: ENB) is your go-to stock in every market cycle. It has funded the retirement of a few generations with its +60 years of dividend-paying history and 30 years of dividend-growth history. Behind this sustainability is its low-risk business model, large pipeline infrastructure that has already paid off, and all the toll money coming from it is Enbridge’s earnings.

The recent noise around the back and forth of Trump tariffs on Canada’s oil exports did create a stir. However, Enbridge has sufficient buffer to handle such tariffs in the short term. Tariffs are not long-lasting as negotiations find a way for the trade to thrive in the long term.

The one risk Enbridge faces is the energy industry transition to greener alternatives. However, the shift is gradual, and the company is transitioning with the industry. It is increasing the share of natural gas in its portfolio to take advantage of North American gas exports to Europe and other countries.

Investor takeaway

Enbridge stock can help you earn a 5.83% annual yield, but the payouts will be quarterly. CT REIT’s payouts are monthly. A $40,000 investment in each of the two stocks through TFSA could give $403 in tax-free monthly income, or $4,847 a year.

In an emergency, you can sell these stocks and get immediate liquidity. As they are low-volatility stocks, your invested amount may not be significantly affected.