Thinking that your Tax-Free Savings Account (TFSA) strategy is evergreen and perfect for retirement is a bit like assuming the same pair of shoes will work for every part of your journey. While you’re earning a paycheque, you can afford to let your TFSA focus heavily on growth because you don’t need it to pay the grocery bill. Once that paycheque disappears, you’d want the account to behave differently.
Turning a retirement TFSA into an ultra-conservative portfolio may feel reassuring, but you could still need that money working for another 20 or 30 years. That means you might want to balance steady income with continued growth so you aren’t forced to sell investments too often. But unfortunately, some common TFSA habits could make achieving that balance more difficult.
Let me highlight two habits I’d reconsider in retirement and how some fundamentally solid Canadian stocks could help solve the problems they create.
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Relying too heavily on capital gains
Chasing capital appreciation could work well when your retirement is years away, and you do not need portfolio income. After retirement, however, relying on selling shares to generate cash could make your portfolio more dependent on market fluctuations. And a quality stock like Canadian National Railway (TSX: CNR), or CN, shows how investors could keep pursuing growth without depending entirely on selling shares for cash.
CN operates a nearly 20,000-mile rail network connecting Canada’s eastern and western coasts with the U.S. Midwest and Gulf Coast. After gaining 27% over the last 12 months, its stock currently trades at $169.87 per share with a market cap of $102.2 billion. At this market price, it offers a 2.2% annualized dividend yield.
In the second quarter, CN’s revenue jumped 11% year-over-year (YoY) to about $4.8 billion, while its revenue ton-miles rose 5%, driven mainly by strong grain and energy volumes. As a result, the company’s net profit climbed 7% YoY to roughly $1.2 billion.
During the first half of 2026, CN also generated about $1.8 billion in free cash flow. That cash generation matters for a dividend-paying business as it gives the company flexibility to fund its operations, invest in its rail network, and return capital to shareholders.
Moreover, CN has room for further growth as it plans roughly $2.8 billion in capital investments this year alone. For retirees, that great combination of income and growth is what makes CNR attractive.
Becoming too conservative after years of saving
If the first mistake is depending too much on growth, the second is giving up on it altogether. And a stock like Great-West Lifeco (TSX: GWO) could help retirees avoid that extreme by pairing dividend income with rising earnings.
Simply put, this Winnipeg-based company provides retirement, wealth, workplace benefits, and solutions across Canada, the United States, and Europe. GWO stock trades at $91.42 per share with a market cap of roughly $81.5 billion. Despite its 68% gain over the last year, the stock still offers a 3% dividend yield.
Great-West’s second-quarter base earnings rose 11% YoY to nearly $1.3 billion. Its U.S. business has also been strong. This segment’s base earnings jumped 34% YoY in constant currency last quarter, helped by higher fee income from growing client assets, positive plan and wealth net inflows, and lower credit-related impacts.
Meanwhile, the company is also investing capital to accelerate its future growth. On September 2, Great-West’s subsidiary Empower completed its acquisition of Milliman’s retirement plan and benefits administration business. The deal added about 400 defined benefit plans and more than 1,100 defined contribution plans, representing roughly US$130 billion in combined client assets.
Retirees who become too defensive could still get a 3% dividend yield while maintaining exposure to a business growing earnings and expanding its retirement platform. In other words, retirement does not have to mean giving up on growth.
