For retirees, generating reliable income while preserving and growing capital can be a difficult balancing act. After a strong rally in Canadian stocks, simply buying the broad market may no longer provide the level of income many retirees need. iShares S&P/TSX 60 Index ETF, for example, has climbed about 69% since 2024 and currently offers a distribution yield of only 2%.
That makes income-focused stocks worth considering, particularly for investors who expect their retirement portfolios to last another 10, 20, or even 30 years. One idea is Brookfield Infrastructure Partners L.P. (TSX: BIP.UN).
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A high-yield infrastructure stock
Brookfield Infrastructure is built around assets people and businesses rely on every day. Its globally diversified portfolio includes utilities, transportation infrastructure, energy infrastructure, and data assets. These businesses tend to generate relatively predictable cash flows, supported by long-term contracts and regulated frameworks.
This kind of resilient business model can be especially attractive for retirees. Instead of relying entirely on selling shares to fund living expenses, investors can receive quarterly distributions while continuing to watch their investment grow as the underlying portfolio expands.
At recent prices, BIP.UN offers a yield of roughly 4.6%, significantly above XIU’s yield. More importantly, the distribution has a strong track record. Brookfield Infrastructure increased its distribution for the 17th consecutive year in 2026, raising the quarterly payout by 5.8% in January. Management targets annual distribution growth of 5% to 9%.
This growth matters. A retiree who buys a stock solely for today’s yield could see purchasing power eroded by inflation. A growing distribution, however, can provide a rising income stream over time.
Why you could hold Brookfield Infrastructure for 10 years
Brookfield Infrastructure’s appeal isn’t just its current yield. The company has a strategy designed to compound value over the long term. It acquires infrastructure assets, improves their operations, and eventually recycles capital from mature investments into new opportunities.
The company reported that funds from operations (FFO) per unit have compounded at 14% annually from 2009 to 2025, while distributions have grown at a 9% compound annual rate over that period. Going forward, it still projects solid growth of at least 10% per year in its FFO per unit.
Even the best of investments have risks, though. Infrastructure businesses can carry substantial debt, and higher interest rates can pressure valuations and financing costs. BIP.UN can also be volatile, particularly when investors rotate away from income-oriented investments. Retirees should therefore avoid treating it as a bond substitute and consider it as part of a diversified portfolio.
Consider holding it in a TFSA
For Canadian retirees, the Tax-Free Savings Account (TFSA) can be a good home for income-generating investments. Eligible investments can grow tax-free, and withdrawals are not taxed.
Statistics Canada data show substantial TFSA participation among Canadians aged 65 and older — a higher utilization rate than other age groups.
Remember to check your available TFSA contribution room with the Canada Revenue Agency because over-contributing leads to a penalty tax.
The bottom line
Retirees shouldn’t chase the highest yields available, as these yields could be at risk of being cut. Perform due diligence when considering potential investments for your retirement.
A stock such as Brookfield Infrastructure Partners offers an attractive combination of income, distribution growth, diversification, and long-term infrastructure exposure. For retirees prepared to tolerate share-price volatility and hold for a decade or longer, BIP.UN could be a good income-and-growth candidate, especially on market corrections.
