High-yield dividend stocks can be a powerful source of passive income in a Tax-Free Savings Account (TFSA). Retirees get something incredibly valuable: predictable, tax-free cash flow that lands in their account without touching their savings. Instead of worrying about selling shares during a market dip or budgeting around fluctuating returns, a strong monthly or quarterly dividend becomes a steady paycheque. And unlike Guaranteed Investment Certificates (GICs), high-yield stocks can also grow in value over time. This gives retirees both income and long-term protection against rising living costs. It’s a simple, reliable way to let your money do the heavy lifting while you enjoy your retirement. So, let’s look at two dividend stocks to get you that life.
AI
Atrium Mortgage (TSX:AI) is a specialty lender focused on residential and commercial real estate financing in markets where traditional banks may be more restrictive. It earns interest income from its loan book, which it passes through to shareholders in the form of a high monthly dividend. Because Atrium is tied to secured real estate lending rather than property ownership, its business model tends to be defensive, cash-generating, and relatively stable during normal economic conditions.
Atrium’s most recent earnings showed steady interest income driven by its strong mortgage portfolio and disciplined underwriting. Higher rates increased the yield on its loans, supporting net income despite a careful approach to new lending volumes. Management highlighted that credit quality remained solid, loan losses were minimal, and leverage was controlled. This allowed the dividend stock to maintain its dividend. The focus remains on conservative lending and protecting shareholder distributions.
Atrium is popular among income-seeking investors as it pays one of the highest monthly yields on the TSX — all backed by steady mortgage interest rather than volatile market cycles. Retirees value this kind of stability. The loan book is diversified, secured, and actively managed to protect capital. When held in a TFSA, Atrium’s monthly payouts are entirely tax-free, turning its high yield into real spending money. As long as credit conditions remain stable and management maintains prudent lending standards, Atrium offers retirees dependable passive income without needing to sell a single share.
TF
Timbercreek Financial (TSX:TF) is a mortgage and real estate lender that, similar to Atrium, focuses on generating interest income through a diversified portfolio of secured loans to real estate developers and income-producing properties. It operates as a financial intermediary rather than a property owner. This helps keep cash flow steady and relatively predictable. Its high yield makes it attractive to investors who want income first and foremost.
The latest earnings results showed strong net investment income supported by higher interest rates on its loan portfolio. Credit quality remained stable, with only modest provisions set aside for potential loan losses. Management reported solid distributable income and reaffirmed its commitment to maintaining shareholder payouts. While loan origination slowed due to market conditions, overall results demonstrated resilience.
TF delivers one of the highest yields in the Canadian market, making it a compelling option for retirees aiming to maximize tax-free income. Its business model is built for cash generation as well. Loans produce predictable interest, and distributions flow directly to investors. Because the dividend is supported by recurring lending revenue, retirees can rely on the income without worrying about daily market fluctuations. Inside a TFSA, this income becomes fully tax-free, turning TF into an efficient, high-yield income engine for anyone looking to live comfortably off their portfolio.
Bottom line
Retirees have enough to worry about. Creating a passive-income stream through two dividend stocks can be at least one item that takes stress off the table. Right now, even $7,000 can bring in ample income from these two dividend stocks.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| AI | $11.48 | 609 | $0.93 | $566.37 | Monthly | $6,996.12 |
| TF | $6.77 | 1,033 | $0.69 | $712.77 | Monthly | $6,991.41 |
In short, if you’re a retiree looking to create high-yielding passive income, consider these two dividend stocks on the TSX today.
