Retirement sneaks up fast. One day, a Tax-Free Savings Account (TFSA) feels like a bonus account. The next, it starts to look like one of the most useful retirement tools Canadians have. By the time investors approach 60, the question changes from “Should I invest?” to “Have I built enough flexibility?”
Source: Getty Images
Enough is enough
The typical balance may surprise people. Canada Revenue Agency data for the 2023 contribution year showed Canadians aged 55 to 59 held an average TFSA fair market value of about $37,600. Those aged 60 to 64 held about $45,109. So Canadians approaching 60 often sit somewhere around the high-$30,000 to mid-$40,000 range.
That doesn’t mean everyone should panic. Averages can hide a lot. Some Canadians use TFSAs aggressively, while others hold cash, withdraw often, or focus on the Registered Retirement Savings Plan (RRSP) first. Still, these numbers give investors a useful checkpoint. If retirement sits close on the calendar, every TFSA dollar should have a job.
MREL
That’s where Middlefield Real Estate Dividend ETF (TSX: MREL) comes in. It won’t suit every investor. But for Canadians who want monthly income, real estate exposure and diversification in one holding, it looks worth considering.
MREL invests in global real estate companies. Its portfolio spans commercial real estate sectors such as industrial, data centres, retail, healthcare, cell towers, office, and residential. That mix gives investors more breadth than buying one real estate investment trust. It also gives them exposure to areas that still have long-term demand, even while the real estate market works through higher borrowing costs.
The timing looks interesting. Real estate stocks struggled while interest rates stayed high. Higher rates made financing more expensive and pushed investors toward safer income options like guaranteed investment certificates. But if rates move lower over time, income-focused real estate investments could regain attention. Investors near retirement don’t need (or want) a dramatic rebound to benefit. They need steady distributions, reasonable diversification, and the chance for capital recovery.
Numbers don’t lie
MREL currently pays a monthly distribution of $0.075 per unit. That adds up to $0.90 annually, yielding about 6.8% at writing. For someone with a $40,000 TFSA, a yield near that level could produce roughly $2,700 in annual income before any price changes. Inside a TFSA, that income can arrive tax-free, which makes it especially useful for retirees managing taxable income, Old Age Security clawback concerns, or cash-flow needs.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| MREL | $13.49 | 2,965 | $0.91 | $2,698.15 | Monthly | $39,997.85 |
The fund also offers a simple way to reinvest. Investors who don’t need the income right away can use distributions to buy more units. That keeps the TFSA working without forcing constant decisions. Then, closer to retirement, those same monthly payments can help cover smaller expenses without touching the principal too quickly.
Considerations
Of course, MREL carries risk. Real estate stocks can fall if rates stay higher, debt costs rise, property values weaken, or tenants struggle. The ETF also charges fees, with a management expense ratio (MER) around 1.1%. That’s higher than that of a broad index fund, so investors need to decide whether the active real estate strategy and monthly income justify the cost.
The other risk involves concentration. MREL diversifies within real estate, but it still depends on one sector. A retiree shouldn’t build an entire TFSA around it. Instead, it could fit beside broad-market ETFs, dividend-growth stocks, cash, or short-term fixed income. That combination can smooth out the ride, while still leaving room for income and growth. At retirement, that balance often beats swinging for the fences with one big bet.
Bottom line
The TFSA numbers tell a clear story. Many Canadians near 60 don’t have giant balances. That makes each investment choice more important. MREL offers income, diversification, and exposure to a sector that could improve if rate pressure eases.
For Canadians reaching retirement, the goal isn’t to chase the hottest stock. It’s to build a TFSA that can pay, grow, and stay useful. MREL could help do exactly that. And that can make retirement feel far less fragile.
