When it comes to pensions, the Canada Pension Plan (CPP) serves as the benchmark, as every Canadian in the workforce gets CPP between the ages of 60 and 70. The Canada Revenue Agency (CRA) determines the CPP payout, and for 2026, the maximum payout is $1,507.65 per month. You can get the maximum CPP if you contributed the maximum amount for 39 years.

We took the maximum self-employment contribution for the last 39 years, as they contribute for both the employer and employee. The total contribution stood at $154,642 after including the 2026 contribution. If the monthly CPP payout is $1,507.65, it is 1% of the cumulative contribution of 39 years.

CPP vs. your own pension

With the CPP, you can’t determine the payout or say where to invest. The only thing you can determine is whether to collect the payout at age 60, 65, or 70. However, the payout is guaranteed, and you don’t need financial planning to get CPP, as the CRA has done it for you.

What if you want to take a career break for a year at age 45 and live off a pension? In such a scenario, having your own pension comes in handy. You are in full control of your pension, how much to invest, where to invest, and when to take a payout and when to stop. You can also make your pension tax-free by investing through a Tax-Free Savings Account (TFSA).

How to create your own pension with dividend stocks

If you want your own pension to match the CPP payout, your portfolio should pay 12% annually so that 1% of your investment can be paid every month. A 12% dividend yield is risky. But you can earn such a high yield in fundamentally strong stocks by compounding dividends.

CT REIT

The landlord of Canadian Tire, CT REIT (TSX:CRT.UN), offers a 5.76% annual yield paid out in 12 monthly installments. It is among the few real estate investment trusts (REITs) that offer a dividend-reinvestment plan (DRIP) and even grows dividends at an average growth rate of 3%. CT REIT manages to offer both DRIP and dividend growth because of its special arrangement with Canadian Tire. The REIT has the first right to buy, develop, and intensify a Canadian Tire store. Moreover, the rent grows by 1.5% annually. The increasing rent and addition of new stores help CT REIT earn higher cash flow, which it passes on to unitholders.

The REIT has a dividend-payout ratio of 73.5%, which shows it has ample financial flexibility to pay debt and grow dividends even in a weak economy.

Although CT REIT has a 5.73% yield, it can become 14% with DRIP, as the dividend amount is reinvested to buy more income-generating units. A $10,000 investment in 2014 would have bought 897 units, which would generate $582.96 in annual dividends with a 5.8% yield then. This dividend amount, when reinvested, accumulated 49 more units and, over the years, increased the dividend by around 150%. After 12 years of compounding through DRIP, your realized dividend yield on your $10,000 TFSA investment is 14.4%.

Capital Power

Capital Power (TSX:CPX) is another dividend stock that grows its dividend and started offering DRIP in 2023. Its source of cash flow is acquiring, developing, and maintaining power plants. Its key focus is now on building natural gas-fired power plants for artificial intelligence data centres and has a US$1 billion earnings before interest, taxes, depreciation, and amortization opportunity. The company aims to maintain a 2-4% dividend growth till 2030.

The DRIP, dividend growth, and current 4.25% dividend yield make Capital Power an ideal choice for a personal pension.

The post How to Create Your Own Pension With Dividend Stocks appeared first on The Motley Fool Canada.

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Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Capital Power. The Motley Fool has a disclosure policy.

The average Registered Retirement Savings Plan (RRSP) balance of Canadians over 65 is $756,497, as per 2023 data from Statistics Canada. Is this sufficient for retirement? Not exactly. But the RRSP is not the only source of income in retirement.

Remember, the Canada Revenue Agency (CRA) created RRSPs to encourage individuals to save for retirement by offering them the option to deduct contributions from taxable income.

When an RRSP matters the most

The RRSP matters the most when you have a high income, as it can help you save tax. You can contribute to an RRSP and keep carrying forward the unused contribution to use all the accumulated unused contribution in the years you earn significant taxable income.

When an RRSP doesn’t matter much

However, the RRSP balance doesn’t matter much after retirement, as withdrawals are taxable. Moreover, you cannot completely control RRSP withdrawals after retirement. An RRSP is active till age 71, after which you have to transfer to a Registered Retirement Income Fund (RRIF) to avoid getting taxed on your RRSP balance. The RRIF has a minimum withdrawal amount, which is determined by your age and RRIF balance, and is taxable income. You can withdraw more, but a withholding tax will apply.

Also, RRIF withdrawals can affect your Old Age Security (OAS) pension amount, which depends on your taxable income.

Overall, RRSPs are not quite tax-efficient after retirement.

Three things that matter more than an RRSP in retirement

TFSA

A better and more tax-efficient withdrawal option in retirement is the Tax-Free Savings Plan (TFSA). TFSA withdrawals are not included in taxable income, and you can continue contributing and withdrawing from a TFSA even after age 71. This account helps you invest even after you retire, while the RRSP doesn’t. So, if you see an opportunity whereby a $2,000 investment can grow to $3,000 in a year because of a cyclical upturn, you can invest in a TFSA, irrespective of your age.

At present, Lundin Gold and Shopify (TSX:SHOP) have such an opportunity. Shopify can give you a 50% upside this holiday season as it integrates artificial intelligence (AI) to help merchants sell more. Merchants opting for AI solutions will help Shopify earn more revenue from merchant solutions and tap new channels for optimizing the shopping experience. The stock has dipped in March because of seasonality, like every normal year, creating a buying opportunity. Retirees can allocate a small portion towards such growth stocks.

CPP

Another thing that matters the most after retirement is the CPP. The CRA determines the CPP payout depending on the best 39 years of your contributions, but you can choose when to start your payout. The ideal age is 65. If you take an early payout at 60, the amount will reduce by 7.2% per year, and if you postpone till 70, it will increase by 8.4% annually.

OAS

You made contributions for CPP, RRSP, and an employer pension. However, OAS is a benefit funded by the CRA, and you don’t want to miss it. OAS payments are significant and taxable. The monthly payment for the January to March 2026 period is $742.31, which you can get if your 2024 taxable income was less than $148,451. Any income beyond this threshold might trigger the OAS clawback.

Investor takeaway

Retirement planning is not just about having a high RRSP balance. You also have to consider post-retirement taxes and diversify the income streams that give you control over your payout. Combining an RRSP with a TFSA, CPP, and OAS ensures more control over payouts and a tax‑efficient retirement strategy.

The post Your RRSP Balance Doesn’t Matter as Much as These 3 Things in Retirement appeared first on The Motley Fool Canada.

More reading

• Where to Invest Your $7,000 TFSA Contribution
• The Top Canadian Stocks to Buy Right Away With $40,000
• Invest $5,000 in This Dividend Stock for $145.75 in Passive Income
• 2 Cheap Tech Stocks to Buy Right Now
• The Secrets That TFSA Millionaires Know

The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned.

When you have a large sum at your disposal, the temptation to splurge increases. You end up buying things you don’t need. And if you are not splurging, you are parking the money in term deposits to make it available for use.

Investing in stocks

Many Canadians refrain from investing in stocks because of the risk that the invested amount may fall. Your $40,000 may become $35,000 or $30,000 in the short term. But this dip might be temporary because of market conditions. If you sell a fundamentally strong stock at the dip, you are making that loss permanent. The risk of staying away from cash for three to seven years is what makes many Canadians lose the opportunity to double their money.

Instead, you should stay invested if your reason to be bullish on the stock is still strong. Don’t let short-term volatility cloud your long-term returns.

Top Canadian stocks to buy with $40,000

If you have $40,000 to invest, here is a balanced investment strategy for growth during economic recovery, dividends in uncertainty, and a hedge in crisis. Having four stocks that react differently to a situation can mitigate downside risk and enhance returns through equity growth opportunities.

Growth stocks for uncertainty

Shopify (TSX:SHOP) and Topicus.com (TSXV:TOI) are two Canadian tech stocks worth investing a lump sum in. They are trading near their lows as economic uncertainty slows shopping and business activities.

Shopify stock has slipped 32% so far this year, and a 30–40% seasonal dip is perfectly normal for it. Going by the fourth quarter figures, the e-commerce giant is enjoying consistent double-digit growth in revenue and free cash flow. Its international expansion is delivering strong growth. It is now adopting artificial intelligence (AI) to enhance customer support and returns, optimize the website, and streamline marketing. The AI-driven revenue could boost its revenue growth in the years to come.

AI adoption, consistency in cash flows, profits, and revenue, and a share price dip make Shopify a buy right now. The stock could surge 50% on a holiday season rally and grow $10,000 to $15,000, with limited downside risk of 5–10%.

Topicus.com stock has slipped 52% since July 2025 due to a management change at the parent company, Constellation Software, and uncertainty around AI’s impact on software. Topicus.com acquires vertical-specific software companies in Europe. It reported a sharp dip in 2025 net income because it deducted the acquisition cost of a 9.9% stake in Asseco under the equity method to arrive at net income. Moreover, it impaired intangible assets of companies that didn’t meet their goals.

However, these expenses are one-off, and the revenue and profits accretive from Asseco’s acquisitions could help boost earnings in the coming months.

Dividend stocks for uncertainty

The market uncertainty and geopolitical tensions are driving demand for insurance. Power Corporation of Canada (TSX:POW) increased its dividend by 9% as its two largest holdings, Great-West Lifeco and IGM Financial. Power Corporation has a strong portfolio of financial companies, with the above two focused on dividend earnings and GBL and Power Sustainable focused on asset value growth.

Power Corporation stock has slipped 10% from its December 2025 high, creating an opportunity to buy the dip and lock in a 4% yield and dividend growth.

Lundin Gold

Another stock to buy in the current market environment is Lundin Gold (TSX:LUG). The gold miner’s share price fell 23% in March amidst the Iran war. Once the energy shock cools, the gold price could surge as central banks refill their depleted gold reserves. Lundin Gold has zero debt and a low all-in-sustaining cost (AISC) that makes it an attractive investment. The stock may not grow in a strong economy, but it will hedge your portfolio in a downturn.

So, any dip in other stocks will be slightly offset by an increase in Lundin Gold’s share price.

The post The Top Canadian Stocks to Buy Right Away With $40,000 appeared first on The Motley Fool Canada.

More reading

• Where to Invest Your $7,000 TFSA Contribution
• Your RRSP Balance Doesn’t Matter as Much as These 3 Things in Retirement
• Invest $5,000 in This Dividend Stock for $145.75 in Passive Income
• 2 Cheap Tech Stocks to Buy Right Now
• 3 Dividend Stocks Worth Doubling Down on Right Now

The Motley Fool has positions in and recommends Shopify and Topicus.com. The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned.

The average retirement age in Canada is 65, but some prefer early retirement or a career break at age 45, making retirement planning challenging. The Registered Retirement Savings Plan (RRSP) cannot adapt to such changes, but a Tax-Free Savings Account (TFSA) can.

The average TFSA balance of Canadians in the 45–49 age group is $24,150, as per 2023 tax year data from Statistics Canada. The median RRSP balance for Canadians in the 45–54 age group is between $70,000 to $72,600. Is it right to invest more in an RRSP than TFSA, even when you have ample TFSA contribution room?

TFSA vs. RRSP: When you want to retire at age 45

There is a misconception that only RRSPs can be used for retirement. But in reality, the RRSP balance does not matter much after retirement.

The logic behind the RRSP is that you have a high tax liability during your work life and a lower tax liability in retirement, as you earn less. The RRSP allows you to deduct your contributions from your taxable income. But after you retire, you have to transfer the money into a Registered Retirement Income Fund (RRIF), which will give you a minimum withdrawal that will be taxable.

If you retire early at age 45 and want to withdraw passive income from an RRSP, it will be subject to withholding tax.

The TFSA gives that flexibility. You contribute your after-tax income to your TFSA. Once inside a TFSA, your investments can grow tax-free, and you can withdraw your TFSA balance as per your financial needs, with no minimum or maximum limit, and no taxes.

Understanding TFSA retirement

Let’s take a hypothetical situation. You invested $15,000 in Nvidia (NASDAQ:NVDA) in 2016 and left it to grow. Today, you open your TFSA and see that the amount has become $3.4 million. That’s more than enough for you to retire. You can simply move some of this amount to dividend stocks that pay monthly or quarterly dividends. A 6% yield on $1 million comes to $60,000 annually.

The TFSA is the only account that will make these capital gains and passive income tax-free. And your withdrawals will be added to your contribution room on January 1 of next year. No obligation, but an option to contribute more to a TFSA.

Had this same investment been made in an RRSP, the $60,000 dividend income would attract 30% withholding tax, and you would be under an obligation to recontribute that amount in an RRSP. Thus, the TFSA is a better choice if your financial goal is wealth creation and financial flexibility on your invested amount.

Understanding RRSP retirement

The RRSP has more benefits before retirement than after retirement. The Canada Revenue Agency (CRA) allows you to contribute 18% of your taxable income to an RRSP up to a maximum limit. Whatever you contribute, you can deduct from your taxable income. You can deduct it today or in a future year when your taxable income is high.

A smart investor may accumulate and carry forward RRSP contributions and claim the tax deduction when they realize a major gain from the sale of property or investment. It is a good tax planning tool.

But when it comes to retirement, RRSP withdrawals are taxable. It is simply deferring tax to a date when you withdraw the amount. Technically, you are also paying tax on your investment income. Suppose you invested $15,000 in Enbridge (TSX:ENB) in 2016 through an RRSP and got 316 shares. In 10 years, those shares paid cumulative dividends of $11,074, and their value increased to $24,237.

If you withdraw $16,000 at age 45, you will get $11,200 as your financial institution will withhold 30% tax, even if you fall under the 20.05% tax bracket. While the withholding tax will be adjusted to your tax liability, you have to recontribute that amount to the RRSP as per the schedule provided by the CRA.

RRSP withdrawals are not tax-efficient nor flexible, making dividend stocks a better investment option.

The post Here’s the Average TFSA and RRSP at Age 45 appeared first on The Motley Fool Canada.

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• 4 Top Dividend Stocks Yielding More Than 3.5% to Buy for Passive Income Right Now
• Have $21,000 in TFSA Room? Here’s a Dividend Stock Worth Considering
• Interest Rates Aren’t Falling: Here’s What I’d Do With My TFSA
• 5 Canadian Stocks Built for Buy-and-Hold Investors

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge and Nvidia. The Motley Fool has a disclosure policy.

The Tax-Free Savings Account (TFSA) contribution limit is $7,000 for 2026. What is this $109,000 opportunity? The way TFSA works is you need to be a Canadian above 18 years of age and have a Social Insurance Number (SIN). If you met all three conditions in 2009, the TFSA contribution room has been accumulating for you. In the last 18 years, the total contribution room, including the $7,000 limit for 2026, is $109,000.

Something about the $109,000 TFSA opportunity

If you have been contributing to the TFSA, that amount is reduced from the $109,000 room. The ideal scenario would be you maxing out the TFSA every year. Even if you kept the cash as it is, you would have a $109,000 TFSA balance.

But given that the average TFSA balance of a 40-year-old Canadian is around $20,000, many people are not using this account to its fullest. When you check your TFSA contribution room on My CRA Account, you will be amazed to see the available contribution room because your previous year’s withdrawals are added to the contribution room the next year.

How do you stack up the TFSA opportunity?

If you have contribution room of over $100,000, it means you can invest that amount in a TFSA. Whatever your investment earns will be tax-free. A $109,000 investment in 6% dividend yield stock can earn you $6,540 passive income annually. If the same amount is invested in a portfolio of stocks that annually generate 10% returns, then a $10,900 tax-free capital gain would add to your TFSA balance.

However, these numbers are benchmarks. You don’t have to lose your night’s sleep over investing $109,000. You can gradually stack up your TFSA investments as you get extra cash, such as a bonus, proceeds from the sale of your old car, or maturity on an investment.

In fact, Statistics Canada data shows that Canadians, on average, contributed $10,520 in 2023, with those over 65 years of age contributing more than $13,000. In that year, the TFSA contribution limit was $6,500. Suppose you contribute $10,000-$14,000 annually, you can easily play catch-up to the unused contribution room.

Ideal TFSA strategies to stack up $109,000

The benefit of a TFSA is that all your investment income, be it from interest, dividends, or capital gains, is tax-free. It doesn’t add to your taxable income when you withdraw. That means you can still use Old Age Security pension and other benefits that depend on your income level. The right strategy for TFSA is the one that can triple your money in 10 years.

Rebalancing your TFSA portfolio

A wealth-generating strategy is to invest in two to three high-growth stocks, like Celestica and Constellation Software (TSX:CSU), at their dip and rebalance your portfolio annually. In rebalancing, you sell a portion of shares and book profits when the shares are at their high. The capital gain realized is reinvested in other stocks that are trading at their low or in dividend stocks, depending on your strategy.

For instance, let’s say you invested $5,000 in Celestica in March 2023, which has become $15,000. You can sell shares worth $7,000 and invest it in Constellation Software, which is trading near its multi-year low. This way, your Constellation shares are brought purely from profits. They have dipped more than 50% amidst artificial intelligence (AI) woes and a slowdown in software spending. However, it continues to report double-digit revenue and free cash flow growth.

The stock could surge when the market revives, or the company makes a game-changing acquisition or adopts AI in its software products. It reinvests the free cash flow to make new acquisitions, and this has helped it compound its portfolio value in the long term. Constellation could double your money in five years or even less if the recovery kicks in.

Compounding with a DRIP

Another strategy is to invest in a dividend-reinvestment plan (DRIP) of a dividend-growth stock like Telus Corporation or Manulife Financial. The dividends will accumulate more income-generating stocks, and dividend growth will give inflation-adjusted passive income. A 3% average dividend-growth rate can double your dividend income in 10 years.

The post The $109,000 TFSA Opportunity: How Do You Stack Up? appeared first on The Motley Fool Canada.

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Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Celestica, Constellation Software, and TELUS. The Motley Fool has a disclosure policy.

Opportunity is not just in growth but also in dividends. Mining stocks rarely attract dividend seekers due to commodity price volatility. Yet when commodity cycles peak, dividends flow in. One such commodity is gold. Last year, Lundin Gold (TSX:LUG) distributed a total of $2.75 in dividends per share, of which the fixed dividend was only $0.60, and the performance-based variable dividend was $2.15.

Had you invested $5,000 in Lundin Gold at the start of 2025, when it was trading at $31, a $5,000 investment would have provided $442 in annual dividend income and 300% in capital appreciation. That $5,000 would now be worth $15,690.

Should you invest $5,000 in this stock for dividends?

Lundin Gold stock has rallied alongside the gold price rally. Today gold is trading around US$4,400–USS$4,600. While the gold price has slipped drastically after the Iran war, it will likely increase as oil prices stabilize and global central banks rush to fill their gold reserves depleted in the energy shock.

The 15% gold price correction from US$5,200 to US$4,400 in March has created a buying opportunity as Lundin Gold’s share has dipped 26%. When the gold price rises, the stock will also surge. Rising gold prices could mean higher dividend payouts in 2026.

Understanding Lundin Gold’s dividend policy

Like all gold miners, Lundin Gold allocates capital to exploration and sustaining the mine. Lundin Gold used the gold price surge to become debt-free in 2024. Now it has one of the lowest all-in-sustaining costs (AISC).

As per its dividend policy, it allocates US$300 million for its $0.60 fixed dividend. After paying the fixed dividend, the company distributes at least 50% of the remaining normalized free cash flow (FCF) as variable dividends. With low cost and capital expenditure, a higher gold price will convert to more FCF, which in turn will result in higher payouts. In 2025, it earned $926 million in FCF.

The year 2026 started on a higher gold price of US$5,000-plus, increasing the probability of higher dividends. Lundin Gold assumed an average gold price of $4,000 per oz. for 2026. It expects to produce 475,000 to 525,000 oz of gold at an AISC of $1,110 and $1,170 per oz in 2026.

In 2025, it sold 503,330 oz at an average realized price of $3,594. Even if the miner sustains its existing production and the gold price remains above $4,000 in 2026, Lundin Gold could distribute $2.75 in annual dividends.

Invest $5,000 in this dividend stock for $145.75 in passive income

If you invest $5,000 today, you can get 53 shares of Lundin Gold that could pay $145.75 in passive income in 2026. While the amount represents just 2.9% yield, it is the stock price rally that can help you catch the momentum. As the stock price grows, you could sell a few shares and buy stable dividend-paying stocks like Enbridge. Because when the gold price rises, the stock price of other sectors dependent on economic growth falls.

The gains from Lundin Gold can help you buy more shares of Enbridge and lock in a yield of over 6%. Now may not be a good time to buy energy stocks, as they could fall sharply once the oil price reaches a certain limit where consumption takes a hit.

Investor takeaway

Lundin Gold offers a unique blend of growth and dividend income. Its low costs, debt‑free balance sheet, and variable dividend policy make it a compelling choice for investors seeking opportunistic buys. While volatility in gold prices remains, the potential for higher dividends in 2026 is strong.

The post Invest $5,000 in This Dividend Stock for $145.75 in Passive Income appeared first on The Motley Fool Canada.

More reading

• Your RRSP Balance Doesn’t Matter as Much as These 3 Things in Retirement
• The Top Canadian Stocks to Buy Right Away With $40,000
• The Only 3 Stocks I’d Consider Buying in March 2026
• This Aggressive Savings Strategy Can Help Make Up for Lost Time
• If You’d Invested $100 in Suncor Energy 5 Years Ago, Here’s How Much You’d Have Today

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

A TD Bank survey found that most Gen Zs and millennials are using a Tax-Free Savings Account (TFSA) to park their money for later use. They are not investing that money, and one of the reasons is that they don’t know where to invest, and some assume they don’t have sufficient funds to invest. This article will clear that confusion and help you make the right TFSA investment choice for a dependable cash payment.

Clearing the confusion around savings vs. investing in a TFSA

We get that confusion, that is, why many Canadians mistake a TFSA for a bank savings account. But a TFSA is actually an account for long-term investing. Not just any investments, but those that give high capital growth and high yield. This is because whatever income or capital gain you earn in the TFSA, you don’t have to report it to the Canada Revenue Agency (CRA).

The limitation is that there is a contribution limit, which you can check in your My CRA Account. For 2026, you can invest $7,000. And remember, if you withdraw the money, it won’t be added to your contribution room until the next tax year.

That’s because the TFSA contribution is updated only once a year, and that is on January 1. Suppose you invest $7,000 and withdraw $5,000 in 2026. If you reinvest $5,000, that will be counted as an overcontribution. You will have to wait until January 1, 2027 for that $5,000 to be updated in your contribution room. Thus, we said at the start of the article that a TFSA is a long-term investment account.

An ideal TFSA pick for cash payments

If you are looking to earn a fixed amount every month, SmartCentres REIT (TSX:SRU.UN) is an ideal TFSA pick for its 6.9% yield. The REIT earns money from rental income, and its largest tenant is Walmart. Walmart is not just a grocer but also an anchor that attracts other retailers and households.

SmartCenters has a pretty significant intensification program ongoing to convert its shopping centres to city centres, which have everything from offices to shops, residents, and storage rooms. These city centres are strategically located at the crossroads to make them accessible to shoppers in a wider circumference.

From a dividend standpoint, 23% of the rental income from Walmart creates a dependable cash flow. The Walmart-anchored stores are also essential retail tenants, and most of their tenants have high creditworthiness. Over the last 21 years, SmartCentres has never slashed its dividend. It has grown dividends in 10 out of those 21 years.

How to maximize cash payments from the 6.9% yield

You need not limit your TFSA cash payments to the 6.9% yield. If you don’t need those cash payments urgently, you can use those monthly payouts to buy more dividend stocks or more units of SmartCenters REIT.

Suppose you invest $5,000 in SmartCenters REIT, you can earn $28.67 in monthly dividends. There are several REITs and energy stocks, like Freehold Royalties, available under $25, which you can keep buying. That way, you can compound your returns.

Investor takeaway

The TFSA is not just a savings account — it’s a tax‑free investment vehicle. By choosing dependable dividend stocks like SmartCentres REIT, you can generate monthly income, reinvest for compounding, and maximize your wealth over time. For Gen Zs and millennials, using the TFSA wisely can bridge the gap between savings and true financial independence

The post A TFSA Pick Yielding 6.9% With Dependable Cash Payments appeared first on The Motley Fool Canada.

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• How to Generate $150 in Passive Income With $30,000 in 3 Stocks
• 4 Dividend Stocks to Double Up on Right Now
• Got $10,000? This Dividend Stock Could Deliver $57.60 a Month in Passive Income

Fool contributor Puja Tayal has no position in any of the stocks mentioned.  The Motley Fool recommends SmartCentres Real Estate Investment Trust, Walmart, and Freehold Royalties. The Motley Fool has a disclosure policy.

Telus (TSX:T) stock fell 18% in the last six months to below $18 as management’s dividend updates hinted at stressed financials. It initially announced 3-8% dividend growth between 2026 and 2028, but later paused dividend growth until the stock reflected the business’s value.

Why is this Canadian dividend stock down 18%?

Canadian telecom stocks have struggled since 2022 due to interest rate hikes and regulatory changes. Telecoms have significant debt on their balance sheets, and the 5G infrastructure spending and spectrum buying have increased the debt further.

Significant debt on the balance sheet

As of December 31, 2025, Telus had long-term debt of $27.4 billion, which is 1.3 times its annual revenue. It has more debt than revenue, which raised an alarm. If the debt increased, and earnings before interest, taxes, depreciation, and amortization (EBITDA) were unchanged, how did the net debt to EBITDA reduce to 3.4 from 3.9 times a year before? The telecom increased its cash reserve to $2.6 billion from $869 million in 2024 to control liquidity risk.

Even at 3.4, the leverage ratio is way above its target range of 2.2-2.7. If Telus has to achieve this ratio, it has to reduce its debt by $5 billion, assuming EBITDA remains unchanged.

High dividend-payout ratio

BCE slashed its dividend because its payout ratio had been above 100% for four consecutive years, and it was burning cash on restructuring and interest payments on its debt. In Telus’s case, its payout ratio is 75%. However, 75% ratio is after deducting the $876 million dividend amount used for buying treasury shares under the dividend-reinvestment plan (DRIP). If we add the DRIP amount, the payout ratio is 110% of free cash flow (FCF), way above its target range of 60-75%.

Deteriorating fundamentals affected the share price, and the stock sank to its multi-year low.

Telus’s dividend-turnaround plan

Telus management has developed a turnaround plan to reduce debt and increase FCF. A three-year roadmap with practical financial targets gives investors hope. While these efforts may still not bring the financial ratios within the target range, they will help reduce liquidity risk.

Here are the financial targets for 2026-2028:

Leverage ratio: Telus aims to reduce its leverage ratio to 3.3 times by the end of 2026 by growing revenue and adjusted EBITDA by 2-4%. However, it will have to reduce debt by approximately $1.5 billion to achieve a three times ratio in 2027, assuming adjusted EBITDA grows by 3% in 2027.

To grow EBITDA, Telus is focusing on cross-selling its enterprise artificial intelligence (AI) solutions, which are now a part of its business after the privatization of TELUS Digital. The company also expects to realize annual cash synergies of $150 million in 2026 from this privatization.

FCF: Telus aims to grow its FCF at a compounded annual rate of 10% between 2026 and 2028. Considering that Telus has paused its dividend growth and will step down its DRIP discount, 10% growth should help it achieve a payout ratio of 100% after including the DRIP amount.

To grow FCF by 10%, Telus is reducing its capital expenditures by 10% to $2.3 billion in 2026.

Dividend yield opportunity

If Telus manages to monetize on its real estate and copper assets, it can channel that money into debt reduction. If the business goes as usual, Telus can at least stabilize its fundamentals at the end of 2027. Then it can focus on improving the fundamentals and bringing the ratios within the target range. Once that happens, the telco could resume dividend growth.

Now is the time to buy the stock and lock in 9.3% dividend yield. If Telus achieves the above targets, the management won’t be forced to slash dividends, and the share price will also recover. After four to five years, dividend growth may resume.

Investor takeaway

Telus remains a risky but rewarding dividend stock. While debt and payout ratios are stretched, management’s turnaround plan provides a path to stability. Investors willing to hold through volatility can benefit from a 9.3% yield today and potential dividend growth in the future.

The post This Canadian Dividend Stock Is Down 18% and a Screaming Buy appeared first on The Motley Fool Canada.

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• Looking for a 5.4% Average Yield? These 3 TSX Stocks Are Worth a Look
• This Canadian Stock Is 23% Cheaper Today, But It’s a “Forever” Hold
• BCE or Telus: Which TSX Dividend Stock Is a Better Buy Now?
• The Canadian Blue-Chip Stock Trading at Bargain Prices Right Now
• The $109,000 TFSA Milestone: How Do You Stack Up?

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends TELUS. The Motley Fool has a disclosure policy.

Albert Einstein called compound interest the “eighth wonder of the world”: “He who understands it, earns it; he who doesn’t, pays it”. The math behind compound interest has made patient investors millionaires. The secret of a TFSA millionaire lies in combining compounding returns with the tax‑free growth of the Tax‑Free Savings Account (TFSA). With discipline and strategy, even two to four stocks can make you a TFSA millionaire.

Maxing out on the TFSA contribution room

Your TFSA contribution room started accumulating when you turned 19. The secret to becoming a TFSA millionaire is filing returns even if you don’t have any tax liability. This ensures you accumulate contribution room and tax credits for the future.

So, if you are 19, make sure to get a Social Insurance Number to start accumulating TFSA contribution room. Those who turned 19 in 2009 have a contribution room of $102,000 at the end of 2025. With just a 5% average return, that portfolio could grow to $159,663 — a conservative path to becoming a TFSA millionaire.

Note that even Enbridge gives an average dividend yield of 6.5%, before including any capital gain and dividend growth. This is a conservative portfolio, the bare minimum a disciplined investment can earn.

Using TFSA’s tax-free growth to its fullest

TFSA allows your money to grow tax-free. Selling stocks to book profits and reinvesting them in growth opportunities is a key TFSA Millionaire strategy. A perfect example of rebalancing in the current market would be Suncor Energy (TSX:SU) and Shopify (TSX:SHOP). Suncor stock has surged a whopping 226% in five years, converting $5,000 into $16,273, excluding dividends. A similar investment in Shopify is now $5,934.

Back in March 2021, Shopify stock was trading in a bubble and corrected sharply in the 2022 tech meltdown, which resulted in lower returns. However, the company has restructured since then and even turned profitable, with consistent returns. In November 2025, the stock even broke its 2021 tech bubble peak and has dipped 33% since then. This dip is seasonal, as the first quarter is always slow for the company.

Now is a perfect time to rebalance as Suncor may not be able to hold its all-time high price for long and might see some correction depending on the developments in the Iran war.

A smart TFSA millionaire plan would be to rebalance — sell part of Suncor (shares worth $6,000) at its high and reinvest in Shopify during seasonal dips. This way, you book the profit and reinvest that amount to compound in Shopify’s seasonal rally in the second half. Meanwhile, you will still own Suncor stocks, which will keep paying dividends. If you invest in the Suncor dividend-reinvestment plan (DRIP), your dividend will keep compounding tax-free.

TFSA makes this entire rebalancing strategy tax-free, which would otherwise have attracted dividend and capital gain tax in a non-registered account.

Investor takeaway

Rebalancing and compounding are the foundations of becoming a TFSA millionaire. Rebalancing and compounding can help you make the most of your TFSA contribution room. However, avoid frequent buying and selling of stocks in the name of rebalancing. The Canada Revenue Agency (CRA) does not allow trading in a TFSA. While it has no specific guidelines around investing frequency, buying and selling the same share multiple times in a year and having a holding period of just a few months could attract CRA’s attention. A disciplined approach — rebalancing every two to three years — ensures steady growth without penalties.

The path to becoming a TFSA millionaire is not about chasing every rally but about consistent contributions, patient compounding, and tax‑free reinvestment.

The post The Secrets That TFSA Millionaires Know appeared first on The Motley Fool Canada.

More reading

• Where to Invest Your $7,000 TFSA Contribution
• Canada Is an Oil Exporter: Are You Investing Like One?
• 1 Canadian Energy Stock Set for Major Growth in 2026
• Your RRSP Balance Doesn’t Matter as Much as These 3 Things in Retirement
• The Top Canadian Stocks to Buy Right Away With $40,000

The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned.

Canadians aged 65 could get an average monthly Canada Pension Plan (CPP) payout of $850 in 2026. To earn a similar amount in annual income, you will have to invest a little above $14,000, considering 6% as the average dividend yield from safer dividend stocks. Among the many dividend stocks trading on the TSX, one lucrative stock is Freehold Royalties (TSX:FRU).

This TSX stock can generate $860 in annual income

Freehold Royalties has a history of dividend cuts (eight in the last 28 years), but today it is maintaining financial discipline by keeping dividends and debt targets relative to funds from operations (FFO). It strives to maintain net debt at 1.1 times its FFO and pay 60% of FFO as dividends. Also, it has financial stability to maintain its fixed annual dividend of $1.08 per share even when the WTI falls to US$50/barrel. Such financial flexibility is important for Freehold because of its sensitivity to oil prices.

If the company maintains this financial discipline, a $14,000 investment can earn $860 in annual income. Here’s how. The stock is trading at $17.60 per share, which means $14,000 can buy you 796 shares. At a dividend per share of $1.08, 796 shares can annually pay you $860 in dividend income.

How safe is your annual income with Freehold Royalties?

Previously, Freehold only held oil reserves in Canada. In 2020, it purchased oil reserves in the Permian Basin, that too when the oil market was down. The Permian Basin holds strategic relevance to Freehold for three reasons:

• First, it is America’s largest oil-producing region and fastest-growing natural gas basin. If we only consider the oil and gas output of the Permian, it would be the fourth-largest oil producer and third-largest natural gas producer in the world.
• Second, it has one of the lowest breakevens of US$43/barrel.
• Third, its proximity to the Gulf Coast reduces transportation costs. This point is of particular interest because the US imports oil from Canada, as the cost of transporting domestic oil within the country is high because of its vast lands and expensive US ships.

Before the pandemic, the energy shift from fossil fuels to less-polluting energy sources reduced capital spending on oil. However, the 2030 decade is the year of oil as the global energy crisis once again makes oil the black gold, as it was called during the 1970s energy crisis. You can be assured of receiving $860 in annual income for the next four to five years.

The risks and rewards of investing in oil stocks

Freehold has expanded its reserves for both oil and natural gas and is using this cyclical upturn to keep debt in check. The FFO is the most important metric for Freehold as it doesn’t have any significant operational expenses. It is a landlord who earns royalty fees from ExxonMobil and other oil producers, depending on the oil volumes produced and the oil price. While it has no operational risk, its FFO is vulnerable to oil demand and prices, as oil producers will reduce production in an oversupply situation.

Freehold keeps its fixed costs low to adjust to volatility. It also faces the risk of depleting oil wells or its acquired land having less oil. While its dividends can surge in a cyclical upturn, they can fall in a downturn, as in the 2015 oil crisis and 2020 pandemic.

You can use oil cyclicality to earn a higher annual income from Freehold Properties. When oil supply increases and prices begin to drop, consider switching the $14,000 to Enbridge (TSX:ENB). Enbridge’s source of FFO is toll money for transmitting oil and gas, which remains unaffected by oil prices.

If Enbridge is a safer stock, why not invest in it now?

The Iran war has pushed Enbridge stock to its all-time high of over $75 and reduced its yield to 5%. A $14,000 investment will only earn you $717.80 in annual income. Considering the 5% dividend growth, it will take five years for Enbridge’s dividend to reach $860. You can wait for Enbridge stock to fall and enjoy Freehold’s high yield in the meantime.

The post How $14,000 in This TSX Stock Could Generate $860 in Annual Income appeared first on The Motley Fool Canada.

More reading

• 2 High-Yield Dividend Stocks Canadian Retirees May Want to Consider
• 4 Top Dividend Stocks Yielding More Than 3.5% to Buy for Passive Income Right Now
• Have $21,000 in TFSA Room? Here’s a Dividend Stock Worth Considering
• Interest Rates Aren’t Falling: Here’s What I’d Do With My TFSA
• 5 Canadian Stocks Built for Buy-and-Hold Investors

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge and Freehold Royalties. The Motley Fool has a disclosure policy.