Retiring with a Tax-Free Savings Account (TFSA) is less about hitting a magical number and more about matching your future spending to a tax-free income stream you can actually trust. Start with what you want life to cost in retirement, subtract the income you expect from CPP and OAS, then ask how much of the gap your TFSA needs to cover. A simple rule of thumb says a portfolio can support withdrawals of around 4% per year over a long retirement, so every $100,000 in your TFSA could translate to roughly $4,000 a year in tax-free spending.
That means a TFSA built to $500,000 could support about $20,000 a year on its own, while $1 million could support about $40,000 a year, before any other income. Your real number depends on your timeline, how much risk you can stomach, and whether you plan to lean on dividends, balanced funds, or a mix of both. If you’re building toward those numbers, here are three TSX stocks that can do real work inside a retirement TFSA.
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Fairfax Financial: A Compounding Insurance Giant Built for a Long TFSA Horizon
Fairfax Financial (TSX: FFH) just posted the best year in its history and reminded the market that boring can be beautiful. It runs insurance and reinsurance businesses and invests the float, so it makes money from underwriting and from smart capital allocation. In its 2025 results, Fairfax reported net earnings of $4.77 billion, or $213.78 per diluted share, and book value per basic share rose to $1,260.19 at year-end. It also talked up a consolidated combined ratio of 93% and record underwriting profit.
Fairfax thrives when underwriting stays profitable and investment income keeps rolling, and it noted record interest and dividend income of $2.6 billion alongside net gains on investments. It’s also recently bought back almost US$1.2 billion worth of shares. (Buybacks like these can quietly lift per-share value when the price makes sense.) On valuation, screens recently showed a trailing price-to-earnings (P/E) around 7.8, which looks modest for a business that just grew book value strongly. If you want a TFSA core holding with a track record of compounding, Fairfax makes a strong case.
Canadian Utilities: 54 Years of Dividend Growth and a $12 Billion Infrastructure Pipeline
Canadian Utilities (TSX: CU) offers the kind of steadiness many Canadians want inside a retirement TFSA, even if the headlines look messy. It owns regulated utility assets, so it tends to earn through approved rates and long-life infrastructure. For 2025, it reported adjusted earnings of $658 million, or $2.42 per share, with fourth-quarter adjusted earnings of $197 million, or $0.72 per share.
Furthermore, Canadian Utilities highlighted work on large infrastructure opportunities, including the Yellowhead Pipeline Project, with projected spend estimated at $2.9 billion and a plan to start construction in 2026, subject to approvals. That kind of pipeline, plus ongoing regulated rate base growth, can support long-run earnings and dividends, which is the whole point for retirement planning. The company has a 52-year streak of raising its dividend.
Canadian Tire: A Canadian Retail Institution With Earnings Power and a Transformation Underway
Canadian Tire (TSX: CTC.A) is proving it can still grow in a cautious consumer environment. It runs Canadian Tire, SportChek, Mark’s, a financial services arm, and sits alongside its real estate partner, which gives it a broader earnings engine than many retailers. In its fourth quarter and full-year 2025 results, comparable sales rose 4.2% in the quarter and 4.1% for the year, and it framed the period as real progress in year one of its True North transformation strategy.
Valuation screens recently showed a trailing P/E around 17.3, which looks more reasonable than many retailers, especially if margins hold. For a TFSA investor who wants a Canadian brand with earnings power and a plan, it deserves a close look.
Bottom line
If you’re a Canadian building a TFSA with retirement in mind, the target number is less important than the quality of what’s inside it. Fairfax gives you insurance-driven compounding with a management team that has earned trust over decades. Canadian Utilities gives you regulated infrastructure income with a 54-year dividend growth streak and a decade of capital spending ahead. Canadian Tire gives you a Canadian retail institution with improving earnings and ongoing buybacks. The math of retirement works best when your holdings keep earning through every kind of market — and these three have shown they can do exactly that.
