Retirement Planning: How to Generate $2,000 in Monthly Income

This TSX monthly income fund could be a great core holding for retirement accounts.

Key Points
  • EIT.UN offers high monthly distributions that can help supplement CPP and OAS retirement income.
  • Generating roughly $2,000 per month currently requires an investment of about $342,400 based on today’s payout and share price.
  • The fund’s distributions contain a mix of dividends, capital gains, return of capital, and income, making account placement important for taxes.

Many Canadians eventually realize that Canada Pension Plan (CPP) and Old Age Security (OAS) alone are usually not enough to comfortably fund retirement.

They help create a baseline income stream, but once you factor in housing costs, groceries, utilities, insurance, and inflation, most retirees still need investment income to bridge the gap.

That is one reason income-focused investments remain so popular among retirees. One example is the Canoe EIT Income Fund (TSX: EIT.UN), a closed-end fund specifically designed to generate high monthly cash distributions.

Retirees sip their morning coffee outside.

Source: Getty Images

What is EIT.UN?

Unlike a traditional exchange-traded fund (ETF), EIT.UN actively manages a diversified portfolio of Canadian and U.S. equities with a strong emphasis on income generation.

The fund currently holds 57 stocks and is allocated roughly 47% to Canadian equities, 41% to U.S. equities, with the remainder primarily in cash. Sector exposure leans heavily toward financials, energy, and industrials.

The strategy has performed fairly well historically. With distributions reinvested, EIT.UN compounded at an annualized rate of roughly 18.5% over the past five years.

Of course, those returns come with higher costs and higher risk. The fund charges a 1.1% management fee and also uses leverage, with borrowing permitted up to 120% of net asset value.

How much do you need for $2,000 a month?

For retirees focused primarily on income, though, the monthly payout is the main attraction. EIT.UN currently distributes $0.10 per share every month. To generate $2,000 in monthly income, you would need:

2,000÷0.10=20,0002{,}000 \div 0.10 = 20{,}000

That works out to roughly 20,000 shares of EIT.UN. At a recent share price of $17.12 as of May 14, 2026, the required investment in dollar terms would be:

20,000×17.12=342,40020{,}000 \times 17.12 = 342{,}400

So, investors would need roughly $342,400 invested in EIT.UN to target approximately $2,000 per month before taxes.

A word on tax treatment

One thing retirees should also understand is that EIT.UN distributions are not purely dividends. The fund’s payouts can include a mix of eligible dividends, capital gains, return of capital, and ordinary income.

That distinction matters in taxable accounts because each component receives different tax treatment. Return of capital, for example, is not immediately taxable and instead lowers your adjusted cost base, which can help defer taxes.

Inside a TFSA, however, those distinctions largely disappear because distributions and capital gains remain tax-free. Inside an RRSP or RRIF, taxes are deferred until withdrawal. That is one reason many retirees prefer holding income-focused closed-end funds like EIT.UN inside registered accounts.

Fool contributor Tony Dong has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Retirement

patient tests her eyes with a vision test at a doctor
Stocks for Beginners

Don’t Make This TFSA Contribution Room Mistake

Before adding money to your TFSA, make sure you know your actual contribution room.

Read more »

Warning sign with the text "Trade war" in front of container ship
Dividend Stocks

The Trade War Is Raising Prices Again: This Canadian Grocer Can Protect Its Margins

Trade tensions can raise specific retail costs even when overall grocery inflation is slowing, putting purchasing scale at a premium.

Read more »

Forklift in a warehouse
Dividend Stocks

Apartment Rents Are Slowing: I’d Buy This Canadian REIT Instead

Cooling apartment asking rents make industrial real estate worth another look for investors seeking a different source of monthly income.

Read more »

Blocks conceptualizing the Registered Retirement Savings Plan
Retirement

You Spent 40 Years Building Your RRSP: Here’s How to Draw It Down Wisely

Here's how you can start planning your RRSP withdrawals wisely to keep more of your hard-earned money in retirement.

Read more »

runner checks her biodata on smartwatch
Dividend Stocks

A 7% Yield Won’t Protect You From a Dividend Cut: This Payout Looks Safer

A smaller dividend backed by growing earnings can be more useful in retirement than an unsustainable headline yield.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

You’ve Maxed Your TFSA – Now What?

Maxed your TFSA? These three Canadian growth stocks can help investors keep building wealth while they plan their next investing…

Read more »

The RRSP (Canadian Registered Retirement Savings Plan) is a smart way to save and invest for the future
Retirement

TFSA vs. RRSP: Which Should Canadians Prioritize in 2026?

Here’s what to consider when choosing between a TFSA and RRSP in 2026, plus why the stocks you hold in…

Read more »

dreaming of financial success
Energy Stocks

Government Bonds Are Paying More: I’d Still Buy This Canadian Dividend Stock for the Next 10 Years

Government bonds now offer competitive income, but a growing dividend can become more valuable over a long investing horizon.

Read more »