As retirement approaches, one of the biggest challenges is generating enough income to cover expenses without losing valuable government benefits. For Canadians, the Old Age Security (OAS) pension can be reduced through a clawback if taxable income gets too high. That’s where the Tax-Free Savings Account (TFSA) comes in. Inside that TFSA, a reliable monthly income stock like Choice Properties REIT (TSX:CHP.UN) can make a big difference.
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A perfect pairing
The TFSA is one of the best tools available to retirees. It lets you grow investments tax-free, and all withdrawals, whether income or capital, don’t count toward your taxable income. That means you can enjoy regular payments without affecting income-tested benefits like OAS. If your net income goes above $87,645 in 2025, the federal government will start to reduce your OAS by $0.15 for every extra dollar. So, for anyone close to that threshold, it makes sense to keep income-generating investments inside a TFSA.
Now, let’s talk about Choice Properties. This is one of Canada’s largest real estate investment trusts (REITs). It holds a diversified portfolio of retail and industrial properties, most of which are anchored by grocery stores and essential services. Loblaw is its biggest tenant, an advantage during times of economic stress. Its market cap sits around $10.6 billion, and it has long been a go-to for monthly dividend income.
The numbers
As of June 2025, Choice Properties pays a monthly dividend of $0.06417 per unit. That works out to $0.77 annually. With the share price hovering around $14.50, that gives investors a yield of about 5.3%. And because it pays monthly, it helps smooth out your income and align with monthly expenses. It’s a comforting option when bills roll in every few weeks. In fact, if you took the maximum OAS payment between 65 and 74 and invested it, here’s what that might look like.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| CHP.UN | $14.50 | 601 | $0.77 | $462.77 | Monthly | $8,723.52 |
The dividend stock continues to perform steadily. In its latest earnings report for the first quarter of 2025, revenue came in at $372.5 million, slightly up from the same time last year. Net income was $274.3 million, and funds from operations, a key REIT metric, were strong enough to cover the dividend with room to spare. Choice Properties has maintained a healthy payout ratio, around 45%, based on funds from operations, which suggests the dividend is sustainable.
More to come
The REIT’s portfolio remains in good shape. It holds over 700 properties, with 97% occupancy and an average lease term of nearly 10 years. The dividend stock is focused on high-traffic urban areas, which adds stability to rental income. As part of its ongoing growth strategy, it continues to develop new mixed-use and industrial projects. These efforts provide long-term value and help offset inflation.
The real advantage for retirees comes when you hold Choice Properties in a TFSA. Because the income is tax-free, you won’t see your net income rise the way you would with dividends in a taxable account. That means no impact on your OAS, no added tax burden, and no unpleasant surprises at tax time. Plus, the monthly nature of the payout makes budgeting easier.
Bottom line
Of course, there are risks. Real estate values and interest rates can impact REIT performance. If rates rise significantly, borrowing costs increase, and that can affect profitability. Retail properties also carry some risk if tenant sales decline or lease rates soften. However, with Loblaw as its anchor tenant and long-term leases in place, Choice Properties has more stability than many others in the space.
For retirees looking to preserve their OAS and still generate a strong, reliable income, Choice Properties is a standout option. A 5.3% yield, monthly payments, and steady performance make it ideal for a TFSA. And by keeping income tax-free, it helps protect more than just your portfolio; it helps protect your benefits, too. In retirement, peace of mind counts just as much as the payout. And with a name like Choice Properties in your TFSA, you can enjoy both.
