As the saying goes, “Make hay while the sun shines.” Invest more when you are earning more, so that you have financial security when you retire. Saving for retirement is a long-term goal. And if your retirement is nearing, you want to fire all cylinders and grow your savings as much as possible.
The common practice is to switch your investments to income-generating instruments, as you can’t risk losing out on your life earnings. However, you could allocate a small portion of your savings towards boosting your portfolio by investing in high-growth stocks. The Tax-Free Savings Account (TFSA) is the perfect instrument for such stocks, as you can withdraw any amount at any time tax-free.
Source: Getty Images
A three-year TFSA strategy to boost retirement savings
With the last few years left to retire, all your savings can be channelled in this direction. It’s time to maximize your TFSA contributions to enjoy tax-free withdrawals in the future. Give yourself a commitment to contribute $7,000 annually for three straight years into a TFSA. Five or 10 years may be a long time, but three years is something that seems achievable.
The next step is to invest this money in high-growth, high-dividend stocks that can potentially double your money in the medium term. Stay invested in these stocks unless you need that money. Your risk appetite may not be high, but some companies are set to grow in the next three to five years, driven by their strong fundamentals and secular growth.
goeasy stock
Non-prime lender goeasy (TSX:GSY) is set to ride a recovery rally after falling as much as 26% during Trump tariff uncertainty between February and March. Hopes of the U.S. and Canada reaching a new trade deal without tariffs are fueling optimism in the market.
This deal is crucial for Canada to sustain jobs, control inflation, and fuel growth in the export-led economy. A strong economy boosts consumption and drives loan demand for goeasy.
The lender will also benefit from the Bank of Canada’s interest rate cuts. It can access capital at a lower interest rate and pass on the benefit to borrowers. An increase in its loan book will drive the share price. Moreover, better jobs will reduce credit risk and enhance the value of the loan portfolio. A bigger loan portfolio will mean higher interest income, which will help it continue growing dividends by double digits.
If no deal is reached and tariffs are prolonged, the downside risk is 10-20%. The stock has already priced in the tariff-led economic uncertainty in March. In the worst-case scenario, goeasy may pause dividend growth and resume it when the economy revives.
Investing in goeasy can give extra passive income that grows by 15-20% and help tackle medical inflation.
Nvidia stock to grow retirement savings
Another good investment is the graphics processing unit (GPU) maker Nvidia (NASDAQ:NVDA). It has a competitive advantage in powering artificial intelligence (AI). The company enjoyed the initial rally of the AI revolution. Now, companies worldwide are testing the use of AI. As more applications spring up, the demand for AI infrastructure and network connectivity will grow and drive future AI growth cycles from data centres to AI at the edge.
The next three to five years are crucial for the AI revolution to pick up, and Nvidia will be at the forefront. The upside potential of this stock is difficult to time, but the growth cycle will come, and it can grow your money multiplefold.
The technology ETF
Technology is the future, and its supply chain will grow at various stages. First, the hardware upgrades will drive investment in infrastructure. Then, the software will drive AI applications and monetize the AI hardware infrastructure, resulting in hardware refresh cycles. Opportunities will arrive in building an AI ecosystem.
iShares S&P/TSX Capped Information Tech Idx ETF (TSX:XIT) has invested in application software like Shopify and Descartes Systems, electronics manufacturing companies like Celestica, and blockchain technology like Bit Farms. Whether it is the AI revolution, crypto boom, e-commerce trend, or self-driving cars, the ETF will give you the advantage of riding these rallies and growing your money by strong double digits in three to four years.
