How I’m Structuring My $40,000 TFSA for Steady Monthly Payouts

The TFSA (Tax-Free Savings Account) is the place for Canadian stocks to generate income. All that income is tax-free in the account. You can accelerate your annual returns by 10–20% by only putting your dividend stocks in your TFSA.

If I had a $40,000 TFSA, this is how I would structure my account for a mix of defence, monthly income, and growth.

A top real estate stock for a TFSA

The first stock I would be buying with a $10,000 allocation is Granite Real Estate Investment Trust (TSX: GRT.UN). This $5.6 billion REIT owns and operates 61.5 million square feet of logistics and manufacturing space across North America and Europe.

Its properties form the backbone of modern commerce. Close to three-quarters of its portfolio is focused on modern logistics properties that cater to major e-commerce and distribution players.  

Granite has low leverage, which has afforded it tremendous strategic flexibility. It has grown funds from operation per unit by a 10% compounded annual growth rate (CAGR) over the past five years. The REIT has grown its distribution for 15 consecutive years.

Granite yields 3.9% today. A $10,000 investment in Granite would earn $32.84 monthly.

A top play on seniors retirement communities

Chartwell Retirement Residences (TSX: CSH.UN) is another stock I’d happily own for monthly payouts in my TFSA. It has a market cap of $6.8 billion. Chartwell is the largest retirement residence community provider in Canada. It has over 13,500 suites across the country.

The company has steadily seen demand rise over the past several years. It expects to sit at 95% occupancy across its portfolio by the year-end. Chartwell is enjoying organic rental rate growth, stabilization of new acquisitions, and growth from developments.

Chartwell stock yields 3% right now. It just resumed its distribution growth trajectory. A $10,000 investment in Chartwell would earn $25.27 monthly.

A top energy stock for monthly income

If I was wanting an elevated yield in my TFSA, I would add Surge Energy (TSX: SGY). With oil prices continuing to stay elevated over $80 per barrel, this $1.1 billion company is gushing cash.

While this is one of the smaller energy stocks, it has good assets across Alberta and Saskatchewan. It manages its portfolio very efficiently. This stock is still relatively cheap compared to peers. Surge trades with a 20–25% free cash flow yield.

It is delivering most of that cash back to shareholders. It yields 4.7% today. A $10,000 TFSA investment in Surge would earn $38.83 monthly.

A quality TFSA stock for growth and monthly dividends

The last stock I would buy to round out my TFSA portfolio is Exchange Income Corporation (TSX: EIF). This $7.4 billion stock gives investors a mix of income and growth.

Exchange operates a diversified mix of industrial and aerospace businesses. Its largest segment operates airlines that cater to remote Canadian communities in Canada’s north. There is increased interest in developing northern assets for mining, ports, and defence. That is a long-term favourable tailwind for Exchange.

In recent years, it has delivered strong double digit organic and acquisition growth. Exchange has raised its dividend 19 times since inception. It yields 2.2%. A $10,000 TFSA investment would earn $18.24 monthly.

The Foolish takeaway

This combined TFSA portfolio worth $40,000 would earn $115 of monthly income. That would equate to a portfolio yield of 3.4%. While that is modest, it comes with a high single digit rate of growth. This portfolio has the potential to provide a great blend of solid total returns for the long term.