Retirement planning looks different for everyone, but one thing rarely changes. Most Canadians want enough savings to enjoy life without constantly worrying about money. That is where a Tax-Free Savings Account (TFSA) could become one of your most valuable retirement tools.
While many Canadians prefer to build large TFSA balances over the years, the average account value still falls well short of what could generate meaningful retirement income. If your goal is to create a steady stream of tax-free cash, it could pay off well to think bigger and invest wisely along the way.
Source: Getty Images
How much should you aim for
There is no one-size-fits-all retirement number because everyone’s lifestyle and expenses are different. Even so, the latest Canada Revenue Agency data suggests many Canadians may need to keep building their TFSAs. For example, Canadians aged 65 to 69 had an average TFSA fair market value of $51,244, while those aged 70 to 74 averaged $56,106.
While those balances can certainly supplement retirement income, they’re unlikely to be enough on their own for most retirees. If you want your TFSA to become a dependable source of tax-free income throughout retirement, aiming for a portfolio in the high six figures, or even $1 million over the long term, could put you in a much stronger financial position.
While reaching that goal won’t happen overnight, decades of consistent contributions, dividend reinvestment, and owning high-quality Canadian dividend stocks could make a big difference. Let me highlight two such Canadian investments that could help you get there.
Royal Bank of Canada stock
If you’re looking to build dependable retirement income over the long term, Royal Bank of Canada (TSX:RY) could be a great place to begin.
Being Canada’s largest bank, it operates across personal and commercial banking, wealth management, insurance, and capital markets. Its shares currently trade at $302.13 per share with a market capitalization of $419.9 billion. RY stock has surged 65% over the last year and currently offers a 2.3% annualized dividend yield.
This strong share price performance has been backed by impressive business growth. In its second quarter of fiscal 2026, Royal Bank reported net income of $5.5 billion, up 25% year-over-year (YoY), while diluted earnings per share jumped 27% to $3.85. Growth came from stronger capital markets revenue, higher wealth management fees driven by market appreciation and client inflows, and higher net interest income in both its personal and commercial banking businesses. Lower provisions for credit losses also supported earnings growth.
With consistent earnings growth, a strong balance sheet, and a long history of rewarding shareholders, Royal Bank remains an attractive dividend stock to own for investors building a retirement-focused TFSA.
Brookfield Renewable stock
If you’d like to add a higher-yield investment to your retirement portfolio, Brookfield Renewable Partners (TSX:BEP.UN) deserves a closer look on the TSX today.
Brookfield Renewable owns and operates hydroelectric, wind, solar, battery storage, and other renewable energy assets across North America, South America, Europe, and Asia-Pacific. Its shares currently trade at $44.56 apiece with a market cap of $13.6 billion and offer a healthy 4.9% annualized dividend yield. Even after a recent pullback, the stock remains up 21% over the last year.
Brookfield Renewable reported record funds from operations in the first quarter of 2026, reflecting strong performance across its global renewable energy platform. During the quarter, the company delivered about 1,800 megawatts of new capacity and contracted roughly 1,700 megawatts of projects from its advanced development pipeline. It also continued to target annual project deliveries of about 10,000 megawatts by 2027.
This great combination of a diversified global portfolio, reliable cash-generating assets, and a strong development pipeline positions Brookfield Renewable well for long-term growth. Its higher dividend yield also makes it an attractive complement to a blue-chip bank stock for Canadians looking to build more tax-free retirement income inside a TFSA.
