TFSA at 60: 2 Dividend Stocks to Help Any Canadian Catch Up

Build a stronger TFSA at 60 with two dependable Canadian dividend stocks offering income, stability, and long-term growth potential.

Key Points
  • Maximize Tax-Free Growth at 60: Reviewing your TFSA at age 60 is crucial; it still holds potential for tax-free income and growth with the right investments.
  • Choose Stable Dividend Stocks: Fortis and Enbridge are recommended for their established dividend payments and essential service sectors, making them robust and complementary options.
  • Balance Stability and Income: Fortis offers stability with a 3.10% yield and growth plans, while Enbridge provides higher income with a 4.97% yield, strengthening a TFSA portfolio.

Reviewing your Tax-Free Savings Account (TFSA) at 60 is completely different from a review done at 40 or even 55. At 60, investors might feel a little discouraged about their TFSA balance. Fortunately, there’s no reason for investors to worry.

A TFSA at 60 still has plenty of time to benefit from tax-free income and growth, especially when the portfolio has the right type of investments.

More specifically, that means holding established dividend stocks that provide steady payments and years of increases. Those businesses serve Canadians directly or support markets that Canadians interact with every day.

That beats picking higher-risk stocks. The real question is, what are the two stocks to consider for a TFSA at 60?

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The two dividend stocks that can work together

The two stocks that fit that role perfectly are Fortis (TSX: FTS) and Enbridge (TSX: ENB). Both are established Canadian dividend stocks that offer different strengths to investors looking to build passive income.

Fortis is the stability anchor. The regulated utility operations generate predictable cash flows. The long dividend history also makes it an attractive option as a buy-and-forget pick.

Enbridge offers a higher income that’s tied to essential energy infrastructure. That lets the stock pay a higher dividend while still attaining annual growth.

Together, the two can complement each other within a TFSA at 60.

Let’s take a closer look at both.

Fortis offers stability and growth

As one of the largest utility stocks in North America, Fortis is well known for its defensive appeal. The company operates regulated utilities for millions of customers across electricity and natural gas segments across parts of Canada, the U.S., and the Caribbean.

The regulated nature of the business allows Fortis to generate predictable revenue, which lets it invest in growth and pay out an attractive quarterly dividend.

The sheer necessity of the services that Fortis provides makes it one of the most defensive options for investors on the market.

In terms of a dividend, Fortis offers a quarterly dividend that carries a yield of 3.10% as of the time of writing. While that’s not the highest yield on the market, it is stable and, more importantly, growing.

Fortis has one of the longest dividend increase streaks in Canada at 52 years. The company is also targeting to extend that streak further, with annual upticks of 4% to 6% planned through 2030.

Fortis’s $28.8 billion five-year capital plan, which runs through the end of the decade, should support a good part of that expected growth. The company plans to invest across its regulated utility operations, including transmission infrastructure.

It’s also expected to help provide an annual rate-base growth of nearly 7%.

For investors looking to strengthen their TFSA at 60, Fortis offers a great mix of growth, income, and defensive appeal.

Enbridge accelerates the income side of your portfolio

While Fortis is centred on stability and some growth, Enbridge brings more income to the portfolio.

Enbridge is one of the largest energy infrastructure companies on the planet. It operates pipelines, renewable energy assets and a natural gas utility.

Long-term contracts and regulated operations support much of Enbridge’s business, helping the company generate steady and predictable revenue.

The result is a stable revenue stream that leaves room for growth initiatives and a growing quarterly dividend.

Those growth initiatives include projects from Enbridge’s massive $40 billion backlog of projects. In fact, Enbridge expects nearly $8 billion of those projects to enter service this year.

Enbridge’s dividend is the real reason why investors continue to flock to the stock. As of the time of writing, Enbridge offers a yield of 4.97%, making it one of the better-paying options on the market.

Even better, Enbridge has provided annual increases to that dividend for 31 consecutive years without fail. That fact alone makes this an appealing option for investors looking to bolster their TFSA at 60.

A TFSA at 60 still has time to grow

No stock, even the most defensive, is without risk. That’s why diversifying is so important. Fortunately, both Enbridge and Fortis offer significant defensive moats that complement each other.

They also both offer attractive dividends, which, in my opinion, makes them ideal for any well-diversified portfolio. That includes even a TFSA at 60.

Fool contributor Demetris Afxentiou has positions in Enbridge and Fortis. The Motley Fool recommends Enbridge and Fortis. The Motley Fool has a disclosure policy.

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