3 TSX Essentials Every Canadian Retiree Should Consider

The second phase of retirement planning begins after you retire. Here are three investment tips every retiree should know.

Puja Tayal

Author Bio

Puja Tayal grew up in a small-business family where dinner conversations often centred on working capital and savings. Her early experiences with investing, particularly during the 2008 financial crisis, shaped her approach to understanding markets and evaluating investment opportunities. She began her career at a mutual fund company before moving into investor education and financial writing for asset and wealth management firms. Before joining The Motley Fool, Puja wrote for Market Realist, where she extensively covered the semiconductor industry. Her published work has also appeared in The Indian Express. Puja believes every stock has a story that can help investors understand its potential returns. She combines business analysis with different investing approaches to help investors make informed decisions and align their portfolios with their long-term financial goals. Outside of finance, Puja enjoys long drives, catching up with friends, watching superhero and science-fiction movies, and managing her family portfolio. She also has a keen interest in artificial intelligence and its potential to reshape the world.

Education

Bachelor's degree in Accounting and Finance, University of Mumbai (2007)
CFA Level I

Areas of Expertise

Qualitative company analysis, management strategy, risk assessment, long-term investing, portfolio diversification and rebalancing, dividend reinvestment, cyclical growth opportunities, compounding strategies, growth stocks, and dividend stocks.

Social Media Profiles

Favorite Investment Quote

"Risk comes from not knowing what you're doing." — Warren Buffett

Published April 28, 2025 3:30 pm EDT

When talking about retirement, we often talk about planning for retirement over the next 10-20 years. However, one also needs to plan finances after retirement. Building a retirement portfolio is the first step. The next step is for a retiree to retain and protect the investment from market volatility, build stable passive-income streams that pay irrespective of the economic condition, and adjust the income for inflation.

woman retiree on computer — Image source: Getty Images

Three TSX essentials every Canadian retiree should consider

Diversify passive-income streams

After retirement, passive income plays a crucial role. Even if you have invested in one of the safest dividend stocks, diversify your passive-income stream to reduce concentration risk. Enbridge (TSX: ENB) and Telus (TSX: T) are safe dividend stocks for retirees. While the two stocks are seeing volatility and short-term challenges, which have lowered their share price, their dividend remains safe.

Enbridge’s stock price has declined due to tariffs on Canadian oil exports, a majority of which is transmitted through its pipelines. However, the company has diversified into natural gas by acquiring three gas utilities in the United States. Any weakness in oil cash flows could be offset by gains in natural gas cash flows. Its strict discipline of paying out 60-70% distributable cash flow has given it financial flexibility to sustain dividends per share.

Enbridge stock can give you a 5.89% annual dividend yield and a 3% annual growth rate, which could increase to 5% in 2027 if things go as planned.

Grow passive income

Investing in safe dividend stocks like Enbridge can preserve your passive income. Diversifying some investments to dividend growth stocks like Telus can help you make ends meet.

Remember, the average inflation is 3%, but there are times when inflation jumps. The sky-high grocery costs in 2022 made us realize that inflation-adjusted passive income is not enough. With tariff wars heating up, Canadians should brace themselves for another round of high inflation. And you don’t want inflation to deplete your years of retirement savings.

Telus grows its dividends twice in a year by 3.5%. Although its dividend payout ratios are slightly stressed at 81%, above its targeted range of 60-75%, the telco is looking to improve them by reducing debt and increasing cash flow by monetizing 5G infrastructure.

Even retirees should focus on growth stocks for one-off expense

While retirement is all about passive income, you should set aside a small amount in resilient growth stocks for any one-off expenses. The capital appreciation from that stock can keep your mind at ease and help you avoid selling your dividend stocks during emergencies.

Constellation Software (TSX: CSU) is a safe and more resilient growth stock that can grow your money even if you stay invested for two years. Even in the worst crisis, like the March 2020 pandemic dip, the 2022 tech stock sell-off, or the 2018 U.S.-China trade war, Constellation stock fell by around 20% to its 12-18-month low and was quick to recover. The support at the downside makes it a stock to buy and hold for at least two years. After two years, whenever you sell the stock, you could get more than what you invested because of its long-term growth trend.