Retirement can last longer than some mortgages, and that fact changes the job your portfolio needs to do.
Someone retiring at 65 and living to 95 needs roughly 30 years of income. Keeping enough cash for next month’s groceries is sensible. Trying to fund three decades with investments that never grow is considerably less comfortable.
Inflation is the troublemaker. The Bank of Canada targets 2% inflation. Even if inflation averaged exactly that level for 30 years, an income of $24,000 today would eventually need to become roughly $43,500 simply to buy the same amount of stuff.
| RETIREMENT YEAR | ANNUAL INCOME NEEDED AT 2% INFLATION |
|---|---|
| Today | $24,000 |
| Year 10 | $29,256 |
| Year 20 | $35,663 |
| Year 30 | $43,473 |
That’s why my retirement plan wouldn’t simply chase the largest dividend available today. I’d want income capable of growing.
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Layers of pay
For me, I’d start with enough cash or short-term fixed income to cover near-term spending. That reduces the chance of selling stocks during a nasty market decline simply because the hydro bill arrived at an inconvenient moment. Then I’d build a diversified portfolio of dividend-paying businesses capable of raising their payouts over time.
Registered Retirement Income Fund (RRIF) planning matters, too. Once a Registered Retirement Savings Plan (RRSP) becomes a registered retirement income fund, minimum withdrawals eventually force money out, whether it’s needed or not. At age 72, the prescribed minimum for most RRIFs is 5.4% of the account’s opening value, and the percentage increases with age.
Those withdrawals are taxable, so blindly building the biggest RRSP possible without thinking about future income can create a surprisingly chunky tax bill later. The goal isn’t merely generating income. It’s creating enough flexibility that retirement income, taxes, and inflation don’t spend 30 years wrestling each other in the hallway.
That’s why I’d want growth alongside my Canadian dividend stocks, such as Exchange Income (TSX: EIF).
EIF
ExEIF stock owns businesses across aerospace, aviation, and manufacturing. Its aviation companies provide essential passenger, cargo, medevac, and other services, including in remote and northern communities. Its aerospace operations include surveillance and defence-related work, while the manufacturing side owns niche industrial businesses.
It sounds slightly like someone emptied several companies into the same shopping cart. The diversification is actually part of the appeal. These businesses operate in different markets, reducing dependence on one economic engine.
Recent numbers have been exceptionally strong. EIF stock reported record second-quarter results, with earnings per share rising 29% to $1.01. Adjusted earnings per share (EPS) increased 23% to $1.13, while management raised 2026 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) guidance to between $890 million and $920 million. Those growing earnings just produced something retirement investors should appreciate.
Even more income
EIF stock also increased its monthly dividend in August from $0.23 to $0.24 per share, bringing the annualized payment to $2.88. At a recent share price around $131, that produces a yield of roughly 2.2%. Sure, not huge, but even this amount can earn quite a lot from a $24,000 investment.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| EIF | $131.00 | 183 | $2.88 | $527.04 | Monthly | $23,973.00 |
Furthermore, EIF stock has increased its dividend 19 times since 2004. Better still, its trailing adjusted-earnings payout ratio fell to 65% in Q2, while its free-cash-flow-less-maintenance-capital-expenditure payout ratio was only 55%.
That gives management room to continue investing, making acquisitions, and potentially increasing future income. Investors who don’t need the payment immediately could also reinvest those monthly dividends into more shares.
Bottom line
EIF stock isn’t cheap anymore. The shares have more than doubled over the past year and are trading near record highs. That creates valuation risk if earnings growth slows. Acquisitions add another risk, while aviation operations remain exposed to fuel, labour, weather, and execution costs.
I wouldn’t make it an entire retirement portfolio. Still, that’s rather the point of a 30-year plan. I don’t want one giant yield attempting to do everything. I want cash for today’s spending, diversified income for tomorrow, and businesses capable of making those payments larger years from now. Retirement may last three decades.
The income plan should be built as if it knows that.
