Building a well-diversified portfolio with a growing income stream for retirement takes time and the right investments. Fortunately, selecting those right investments isn’t as hard as it would seem right now.
Here’s a look at how I’d take just $7,000 to start to establish a growing income stream for retirement.
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Start with a big payday that keeps growing
The first stock I would look at to build a growing income stream for retirement is Telus (TSX:T). Canada’s big telecoms are excellent anchors to consider for any portfolio owing to both their solid dividends and reliable business models.
In the case of Telus, the telecom lacks the media segment its larger peers have, but instead offers a growing digital services segment. That business unit continues to provide growth and innovation to the segments it serves, such as health and agriculture.
In terms of income, Telus offers investors a tasty quarterly dividend that comes with two decades of annual or better increases. As of the time of writing, Telus offers a tasty yield of 7.8%.
For investors looking to establish a growing income stream for retirement, that magic number is $2,000. For that initial outlay, investors can expect to generate just shy of $150, which, given the current stock price, is enough to generate a handful of shares each year through reinvestments.
Sprinkle in a REIT
REITs represent another great example for investors to generate a growing income stream for retirement. RioCan Real Estate (TSX:REI.UN) is a key option for prospective investors to consider in this space.
RioCan is one of the largest REITs in Canada, with a portfolio of nearly 200 properties located in major metro markets across the country. And while RioCan’s portfolio has traditionally focused on commercial retail, that mix is changing.
In recent years RioCan has shifted its focus to include mixed-use residential properties. These properties allow investors to generate a monthly income stream for retirement, in a similar manner to landlords collecting rent.
The one difference is that, unlike a landlord, RioCan comes without a mortgage or property taxes. As of the time of writing, RioCan’s monthly distribution works out to a juicy 6.7%.
This means that a $2,500 investment will be enough to generate more than a few shares each year through reinvestment, increasing any future monthly income stream for retirement.
Bank on future growth with this stock
Wrapping up the trio of stocks to build a monthly income stream for retirement is a $2,500 investment into Toronto-Dominion Bank (TSX:TD).
Canada’s big bank stocks are almost always stellar long-term picks. This is because they boast a strong domestic market at home that generates a reliable revenue stream as well as strong growth appeal from foreign markets.
In the case of TD Bank, that growth is focused on the U.S. market where TD operates a large network stretching from Maine to Florida. That network, which boasts millions of customers and billions in deposits, helps to fuel both further growth and a juicy dividend.
As of the time of writing, TD’s quarterly dividend pays out a respectable yield of 4.8. Like RioCan, a $2,500 TD investment will allow investors to generate shares annually through reinvestments.
Invest $7,000 to generate a growing income stream
No stock, even the most defensive, is without some risk. Fortunately, this trio of stocks can generate a growing income stream for retirement. Here’s how I would allocate that $7,000 to begin building out that portfolio.
| Company | Recent Price | No. of Shares | Dividend | Total Payout | Frequency |
| Telus | $22.19 | 90 | $1.67 | $150.30 | Quarterly |
| RioCan Real Estate | $17.49 | 142 | $1.16 | $164.72 | Monthly |
| Toronto-Dominion Bank | $88.62 | 28 | $4.20 | $117.60 | Quarterly |
In my opinion, one or all of the above should be core holdings in any long-term portfolio.
