Market uncertainties often make one review their retirement savings. Ask those who lost a significant chunk of their life savings in the 2008 Financial Crisis. The changing macroeconomic situations may permanently alter the financial landscape for retirees yet again. On one side, you have artificial intelligence (AI) changing the way we work, drive, live, consume content, and learn. Is this AI efficiency coming at a cost? It is difficult to tell. On the other side, the oil and gas supply chain is undergoing a shift. At such times, how does one tell what is sufficient when it comes to retirement savings.

Why $1 million in retirement savings may not be enough anymore?

Until last year, a $1 million retirement savings account gave Canadians peace of mind to retire and live off the passive income these savings generated. However, this may not be enough anymore.

Retirement is no longer defined by age. Many millennials are looking to retire early. If you are not 60 or above, the Canada Revenue Agency (CRA) retirement payouts are not coming to your rescue.

Early retirement

If you are in your late 40s and looking to retire with just a $1 million pool, your savings won’t suffice. Firstly, Canada Pension Plan (CPP) and Old Age Security (OAS) benefits are still 15 years away. Second, your retirement years are longer, which means you want your savings to last longer than 20 years, which is ideally the scenario for retirement at 60. Lastly, lower employment/business income during early retirement could affect the CPP payout, as you do not contribute to CPP from investment income.

Medical inflation

A $1 million retirement savings account may not be enough to cover medical inflation. Medical and long-term care costs will grow at an accelerated rate, and medical insurance can only cover a certain portion of your medical costs. The rising cost of medicines, procedures, hospital stays, and a significant doctor supply crunch means long waits and high costs. If you have a significant medical condition, like diabetes, you might want to consider having a separate portfolio of $1 million dedicated to medical bills.

Taxes

If you are considering building your retirement pool in a Registered Retirement Savings Plan (RRSP), it may not be tax-efficient upon retirement. RRSP withdrawals are subject to withholding tax and can affect your OAS pension, which depends on your income threshold. Once your RRSP ends, you have to shift the money to a Registered Retirement Income Fund (RRIF), which has a minimum withdrawal limit.

Thus, a Tax-Free Savings Plan (TFSA) is an ideal instrument to build a million-dollar retirement pool for emergency money, medical bills, and discretionary spending.

Slowing dividends

Another major issue retirees of tomorrow face is slowing dividends. The business environment is getting challenging and competitive. This has slowed dividends, with many dividend aristocrats altering their dividend policies. While dividend stocks can give you regular income, they may not be able to fight inflation.

How to build your retirement pool

Does this mean you can’t retire on your own terms? Not exactly.

It means that traditional retirement planning strategies have to adapt to the new normal. Instead of relying solely on dividend stocks, your retirement pool needs to have growth stocks that can beat medical inflation. You have to use a TFSA at its optimum to prevent the CRA from taking a big bite from your savings.

The future is AI and technology, and they are the stocks that can give you the accelerated growth your retirement savings need. If you have already invested in Nvidia and made windfall gains, consider booking profits from some shares and investing in Micron Technology (NASDAQ:MU). Micron stock has slipped significantly amidst the Iran war. However, that doesn’t change its secular growth outlook from data centre memory chips.

The money is flowing into building AI data centre chips, making them cash cows of tomorrow. Micron will benefit from the chip shortage, as high demand will help get a higher price. Like Nvidia, Micron may also witness two to three growth phases as the share of higher-margin data centre memory chips will bring windfall gains at least for the rest of 2026 and beyond.

The post Why $1 Million in Retirement Savings May Not Be Enough Anymore   appeared first on The Motley Fool Canada.

More reading

• 3 Stocks That Could Turn a $100,000 Portfolio Into $1 Million Sooner Than You Might Think
• A Rare Investment Opportunity: The AI Stock I’d Most Want to Buy Right Now 
• The Only 3 Stocks I’d Consider Buying in March 2026
• AI Spending Is Poised to Hit $700 Billion in 2026: 2 Top Stocks to Buy to Capitalize on This Massive Number

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

The Canada Revenue Agency (CRA) offers certain cash retirement benefits, such as Canada Pension (CPP) and Old Age Security (OAS), to help retirees meet their basic needs. These benefits are structured to cover your food, clothing, and utilities. If you are still living in a rented apartment or your medical bills are high, CPP and OAS won’t be enough to cover your expenses.

How much of expenses does CPP and OAS cover

The January 2026 average monthly CPP payout at age 65 was $925.35. The monthly OAS for the April to June 2026 period is $742.31 if your 2024 income is below $148,451.

Adding up the two benefits, a 65-year-old single Canadian can get $1,668.4 per month in retirement benefits.

You can look at your current expenditure and calculate the gap. Excluding rent, the gap between your expenses and CPP and OAS payouts could be in the range of $1,000–$1,500 per month.

How to bridge the $1,000 expense gap that CPP and OAS won’t cover  

Retiring can be scary when you don’t have the savings to fall back on. Calculating your future retirement needs can help you build a retirement pool sufficient to fill the gap left by OAS and CPP. Considering a $1,000 monthly passive income as your end goal and the 5.5-6% average annual dividend yield, you can come up with the amount that should be there in your retirement pool.

A $200,000 portfolio that pays 6% annual dividend can fill the gap. If you have that much balance in your Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP), you can consider SmartCentres REIT (TSX:SRU.UN) and Enbridge (TSX:ENB).

Hypothetically speaking, if you invested $100,000 in each of the two stocks, you would come close to the target of $12,000 in annual passive income.

SmartCentres REIT

SmartCentres REIT is in the middle of a large intensification project, wherein it is looking to convert shopping centres into city centres. Thus, its debt is on the higher side. It is using that money to build mixed-use facilities, sell most of them, and increase the market value of its store. This way, it is making optimum use of the land in and around the retail store, especially the underused parking space. It repays debt by selling the apartments and offices. The rental income continues to come from retail stores.

SmartCentres biggest tenant is Walmart, accounting for 23% of its rental revenue. This percentage has reduced over the years as the REIT has been adding new stores and diversifying tenants. It can be a reliable passive income provider as it has passed the test of time and managed to withstand the worst of the crises without dividend cuts. SRU.UN has a 21-year dividend-paying history.

Enbridge

Enbridge is an evergreen passive income stock. However, now may not be a good time to invest a lump sum as the stock trades at its all-time high amidst the energy shock. You could add it to your watchlist and buy it when the stock falls to $60–$65. When the stock has a dividend yield of 6% and above, that is the ideal time to buy.

Enbridge is focusing on increasing its natural gas infrastructure and is on track to bring US$8 billion worth of pipeline projects online. The toll money from these projects will help the company to accelerate its dividend growth rate to 5% in 2027 from the current 3%. This growth will help beat inflation.

How to invest to generate your personal pension

Investing $200,000 in one go may not be a good option. Even a TFSA’s cumulative limit is $109,000. If you still have five years to retire, consider maxing out on your TFSA contribution room first, as RRSP withdrawals are taxable and can claw back OAS if all your taxable income adds up to the threshold. You can invest in some growth stocks like Shopify to grow your TFSA portfolio and keep rebalancing profits into dividend stocks.

The post How to Bridge the Gap When CPP and OAS Won’t Cover Your Expenses  appeared first on The Motley Fool Canada.

More reading

• Here’s the Average Canadian TFSA and RRSP Balances at Age 45
• How to Use a TFSA to Generate $363 in Monthly Tax-Free Income
• Canadian Companies With a Track Record of Consistently Raising Their Dividends
• Here’s My Highest Conviction Canadian Stock to Buy Right Now
• Is Enbridge Stock Worth Buying at Its Current Price?

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

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

• 3 Stocks That Could Turn a $100,000 Portfolio Into $1 Million Sooner Than You Might Think
• What the Average Canadian TFSA Balance Looks Like at Age 50
• 5 Canadian Stocks Worth Buying Today and Holding for the Next 5 Years
• Missed the RRSP Deadline? Here’s 1 Move to Make Now
• 1 Top Growth Stock to Buy in April

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.

In uncertain times, retirement can feel risky. As a retiree, you don’t want to see your life savings lose value in the market downturn. Fortunately, the stock market offers opportunities to generate a higher yield than the Guaranteed Investment Certificate interest rate of 3.6%. While there is business risk associated with stocks, there are certain low-risk businesses with robust asset allocation that can withstand a crisis. These dividend stocks are safer, and if invested through a Tax-Free Savings Account (TFSA), can provide you with tax-free passive income in retirement.

Why yield matters in retirement

Retirement leaves you dependent on investment income with a fixed pool of money. At such times, maximizing yield becomes critical. Retirees should opt for safer dividend options whereby they are assured of the payout. The payout comes from the business’s free cash flow, and that depends on the stability of the income source.

Enbridge’s 5.2% yield: Still lucrative?

The global energy crisis, resulting from the Iran war, sent Enbridge (TSX:ENB) stock to an all-time high of $75. Buying a dividend stock at its all-time high is not recommended as the share price is rising due to the oil price volatility. If you have a few months to retire, you could consider waiting till summer and then buy Enbridge stock as the share price will see a seasonal dip on reduced demand from heating. A $50–60 price is a good entry point as it can help you lock in a 6% yield. The current rally has reduced the yield to 5.2%.

Enbridge earns money from the toll rate it gets for transmitting oil and gas through its pipelines and the utility bill from its gas business in the United States. There is a growing demand for natural gas to power artificial intelligence (AI) data centres. Moreover, the company is tapping natural gas exports. Canada’s push to build energy infrastructure to make its oil and gas available for exports to Asia will help Enbridge to keep earning and growing cash flows for the next decade.

The company expects to increase its dividends per share by 5% in 2027 and beyond. Despite a leverage ratio of 4.7 times, Enbridge maintains a conservative payout ratio of 60–70% of distributable cash flow, giving retirees confidence in its sustainable yield.

If you own this stock, keep holding for its safer dividend payouts. If you are considering buying, wait till July for the stock price to correct to $60 and lower before investing.

SmartCentres REIT’s 6.9% yield

Retirees can consider buying units of SmarrCentres REIT (TSX:SRT.UN) and earn a monthly payout. Its annual yield is 6.9%, almost double the GIC interest rate. SmarrCentres earns cash flow from store rent, of which 22.8% comes from Walmart, which has a recession-proof business.  

The REIT has stood the test of time in the 2008 Financial crisis and the 2020 pandemic lockdowns. Both events had a material impact on its cash flow and the fair market value of its properties. You can be assured of receiving a 6.9% annual yield in the current market environment. The Canadian government’s push to build houses could accelerate SmartCentres’ intensification program to build city centres. City centres can attract better retailers and a higher rent.

Investor takeaway

Retirement is a major milestone, and while the Canada Pension Plan and Old Age Security provide income, maximizing yield from personal savings bridges the gap between pensions and passive income needs. Dividend stocks like Enbridge and SmartCentres REIT offer safer, higher‑yield opportunities that can help retirees preserve capital while earning steady returns.

The post 2 Safer, High-Yield Dividend Stocks for Canadian Retirees appeared first on The Motley Fool Canada.

More reading

• Here’s the Average Canadian TFSA and RRSP Balances at Age 45
• How to Use a TFSA to Generate $363 in Monthly Tax-Free Income
• Canadian Companies With a Track Record of Consistently Raising Their Dividends
• Here’s My Highest Conviction Canadian Stock to Buy Right Now
• Is Enbridge Stock Worth Buying at Its Current Price?

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

A market downturn can erode value from your retirement pool at a time when escalating geopolitical tensions are keeping everyone on their toes. In such uncertain times, prudent investors should steer clear of risky investments, particularly those involving credit-risk companies and certain REITs.

Understanding which stocks to avoid is essential for protecting your financial future. Here’s how to identify companies that might not weather economic storms well:

Warning signs of a weakening stock

Early signs of trouble often manifest through management changes. For instance, Dye & Durham showed signs of weakness when shareholders held management responsible for expensive acquisitions and heavy debt. The founder and his supporters walked away from the board.

Algonquin Power & Utilities also saw the departure of the management team when debt became unbearable. Lightspeed Commerce showed a similar trend, as the founder left after several expensive acquisitions in the 2021 tech bubble. The founder has returned and is working to revive the company. Those who had put their retirement savings in these companies saw their wealth erode.

Two stocks to avoid in 2026

goeasy stock

goeasy (TSX:GSY) stock fell a whopping 70% between March 9 and 17 after the non-prime lender released a financial update ahead of the fourth-quarter earnings scheduled to be released on March 25. It is in the business of managing credit risk. Thus, it charges a higher interest rate to bear the high credit risk. The measurement of delinquency risk is the net charge-off rate, which shows the percentage of loans deemed uncollectible.

Until the third quarter of 2025, the lender boasted an annualized net charge rate of 8.9%. However, this rate has increased drastically to 12.9% for the full year 2025 and is expected to increase to mid-teens in 2026 before declining.

The company has increased its allowance for credit losses on gross consumer loans receivable by $86 million to $528 million, which is almost 10% of the receivables. These losses will eat up goeasy’s profits from net interest income as it has to pay interest to its lenders. If the lender faces a credit crunch, it may resort to dividend cuts.

All these problems appeared after the chief executive officer and chief financial officer resigned in the fourth quarter, and short seller Jehoshaphat Research warned about delinquency issues in September 2025.

goeasy stock is down due to fundamental concerns. Recovery could take a long time, suggesting investors should proceed with caution or consider alternative investments.

Timbercreek Financial

The short-term mortgage lender, Timbercreek Financial (TSX:TF), is also facing increasing credit risk. An increase in expected credit losses (ECL) from $16.1 million in 2024 to $17.9 million in 2025 affected its net income. Timbercreek reported a net loss of $1.1 million in the fourth quarter. A high credit risk loan portfolio loses its fair market value.

The market conditions are tight. Delinquency rates are increasing, and lenders are having difficulty selling collateral. At such times, keeping up with dividends becomes tough. Timbercreek Financial’s net income and distributable income have been falling since 2023 and have failed to recover. The loan yield keeps falling, and the loan volumes are not growing enough to offset the dip in net income. Add to it the rising ECL, and the dividend payout ratio increases to 96.7% of distributable income and 165.8% of earnings per share.

This signals financial stress and increases the risk of a dividend cut. Timbercreek Financial’s share price has already dipped 9.5% between February 26 and March 12. A possible dividend cut could pull the stock down another 10–30%, depending on how steep the cut is.

Shifting focus to low-risk investments

The above stocks are risky and not a buy at the dip. Investors, particularly those protecting retirement funds, should pivot to low-risk investments bearing lower debt burdens. Some low-risk stocks worth considering are RioCan REIT and Freehold Royalties.

To stay informed and adeptly navigate the market, consider subscribing to our newsletter for expert insights and timely guidance on safeguarding your wealth.

The post Protect Your Retirement: Avoid These 2 Stocks appeared first on The Motley Fool Canada.

More reading

• 10% Yield: Here’s the Dividend Trap to Avoid in April
• Down Almost 82% From Its All-Time High, Is goeasy Still a Buy?
• Got $21,000? Turn Your TFSA Into a Cash-Gushing Machine
• This 10.4% Dividend Stock Pays Cash Every Single Month
• Are You Actually Invested or Are You Just Gambling?

The Motley Fool has positions in and recommends Dye & Durham. The Motley Fool recommends Freehold Royalties and Lightspeed Commerce. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned.

At 50, you still have 15 years before you turn 65, the official retirement age of Canada. These 15 years can be a game-changer in retirement planning if you fire all cylinders.

Retirement planning at age 50

At 50, you are probably at the peak of your career and have your own house. The priority should be not to retire with debt. But does it mean you should channel your money into repaying debt? Not exactly. Keep those monthly installments going and increase your investments in growth and high-yield stocks.

Yes, you are not getting any younger. But you have the financial ability to take risks because you are not dependent on your investment income as you would be after retirement.

Maxing out on a Registered Retirement Savings Plan (RRSP) might look like the best option. However, only contribute what you need for tax savings. Max out on your Tax-Free Savings Account (TFSA), as this is the account that will preserve your government pensions and save you from the taxman. TFSA withdrawals are not included in your taxable income and are therefore excluded from income-dependent government benefits like the Old Age Security (OAS).

Here’s how much 50-year-old Canadians need to retire at 65

There is no standard figure for everyone on how much money you need to retire comfortably. However, there are some popular rules that you can use as a benchmark to set a target:

• Replace 70% of your pre-retirement income with investment income to maintain your current standard of living. If a major portion of your current expenses involves mortgage and other debt, ensure to pay them off before retirement.
• The 4% withdrawal rule says you should withdraw 4% of your savings in the first year and adjust for inflation for about 25 years.

So, if you are currently earning $100,000/year, you need annual investment income of $70,000/year, for which you need a retirement portfolio of $1.75 million, whose 4% is $70,000.

Now, Canada Pension Plan (CPP), OAS, and Guaranteed Income Supplement (GIS) give you close to $17,196 in annual income in 2025 if you consider the maximum CPP.

In 2023, people in the 45-54 age group had an average RRSP and TFSA balance of $58,374 ($48,374 + $10,048), as per Statistics Canada data. Assuming this balance has increased to $75,000, you will need to invest $4,500 per month to have a $1.75 million portfolio. This is assuming your portfolio grows at an average annual rate of 8%.

So, to answer the question, you need $75,000 in your RRSP and TFSA and a $4,500 monthly investment at age 50 to retire comfortably at 65.

Which stocks to invest in which account

You cannot control the CPP and OAS payout, but you can control RRSP and TFSA payout. Consider investing in Kinross Gold (TSX:K) and Constellation Software through your TFSA. Gold prices are surging amidst war and geopolitical tensions. The gold price will continue to rise throughout the year if geopolitical tensions escalate, and Kinross Gold will benefit from it.

It has an all-in sustaining cost (AISC) of $1,622 per gold equivalent ounce, and gold is trading at $4,583 at the time of writing this article. The miner has used this cyclical rally to repay debt and achieve a net cash position of $485 million. Its third-quarter 2025 profit per ounce increased by 54% year over year, faster than the 40% increase in average realized gold price. The fourth quarter was stronger than the third, which means higher free cash flow, dividends, and a rising share price.

However, Kinross Gold is a cyclical stock and not something to hold for 15 years. That means you might have to book profits and reinvest the money elsewhere when the economy stabilizes. Until then, the stock can grow your money way higher than 8% and accelerate your retirement portfolio.

For your RRSP, you could consider investing in dividend stocks with a yield of 8% or above, like Telus. Consider reinvesting this dividend to benefit from the power of compounding.

Investor takeaway

Low-yield RRSP dividend stocks can be balanced with high-growth TFSA stocks, ensuring an 8% average yield on your portfolio.

The post Here’s How Much 50-Year-Old Canadians Need Now to Retire at 65 appeared first on The Motley Fool Canada.

More reading

• Here’s the Average Canadian TFSA and RRSP Balances at Age 45
• 3 Stocks That Could Turn a $100,000 Portfolio Into $1 Million Sooner Than You Might Think
• Missed the RRSP Deadline? Here’s 1 Move to Make Now
• Should TFSA Investors Buy Gold on a Dip?
• 2 Canadian Mining Stocks to Buy in March

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

Retirement can be scary when the stock markets are jittery. Will I lose my life savings if I cash out now? Many people invest in growth stocks, thinking they will convert them into dividend stocks when it is time to retire. What if your growth stock is in a cyclical downturn? If the growth stock is trading near its five-year low, you might lose five years’ worth of rallying.

A stock retirees should hold even on the dip

Take the case of Constellation Software (TSX:CSU). This growth stock is trading near its two-year low as the management change has made investors apprehensive. The transition will not be easy, as the company has been led by the founder. Even if the chief operating officer takes over the realm, the transition might slow the acquisitions.

Constellation operates as a private equity firm where trust in the management is extremely important. Until the new CEO wins the trust of investors, the stock may see downside. If you own the stock, you might be skeptical about selling it and losing two years’ worth of growth.

And if you don’t own the stock, now is a good entry point, as you can get it at a discount. It is the first time since the pandemic that Constellation stock has been oversold, with a Relative Strength Index (RSI) of 29. RSI measures the 14-day momentum to identify if the stock is oversold (below 30) or overbought (above 70).

Constellation’s secular growth trend remains intact. The company will continue to acquire companies with stable free cash flows and compound them with more acquisitions. The recovery rally that will follow could boost your retirement savings.

How rebalancing can protect retirees from growth stock volatility

Don’t let your retirement savings be dependent on timing the market. Consider maintaining a set asset allocation. Let’s say you determine your asset allocation to be 60% in growth 40% in dividends. Constant rebalancing will help you book profits at the peak and also build your dividend income pool.

Suppose you invested $6,000 in Constellation and $4,000 in Canadian Natural Resources (TSX:CNQ) in 2020 and bought 4 and 148 shares, respectively. You review your portfolio annually. Their share price momentum changes the allocation to 75% and 25% in January 2021, with Constellation shares valued at $9,388 and CNQ shares valued at $3,049.

You sell one share of Constellation for $2,347 and use that money to buy CNQ shares in January 2021. In this entire exercise, you are booking a portion of the capital gain and transferring that gain into a dividend stock that is trading at a dip.

How rebalancing enhances your stock portfolio

For $2,347, you could have bought 148 shares of CNQ over and above the 193 shares you already own from the initial investment of $4,000 in 2020. As of January 2026, these 341 shares (148 + 193) are worth $15,100, and their annual dividend income is $801. And the Constellation shares are worth $9,623. The allocation has reversed, hinting that it’s time to sell CNQ and buy Constellation.

Why should retirees rebalance?

Had you not done rebalancing and stayed invested in cyclical stocks like these, your returns would be $19,384, and you would have a lower dividend income. You don’t want to retire with such a portfolio where both capital gains and dividends are lower.

You can continue rebalancing even after retirement and enhance your dividend income without adding any additional money from your pocket. Your capital gains will buy you more dividends.

The post 2 Stocks Retirees Should Absolutely Love appeared first on The Motley Fool Canada.

More reading

• 3 Dividend Stocks Worth Having in Every Canadian’s Portfolio
• Canadian Companies With a Track Record of Consistently Raising Their Dividends
• The Simplest and Most Effective TFSA Strategy to Kick Off 2026
• 2 Energy Dividend Stocks That Look Worth Picking Up Right Now
• The Canadian Stocks I’d Consider Most If I Had $10,000 to Invest in 2026

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Natural Resources and Constellation Software. The Motley Fool has a disclosure policy.

2026 will set the tone for new deductions, tax brackets, and contribution room. The maximum Canada Pension Plan (CPP) contribution for 2026 is $4,646.45 if your maximum pensionable earnings are $85,000 and above. The contribution amount is 4.9% higher than $4,430.1 in 2025.

How your employer will determine your CPP contribution in 2026

First, write down your annual salary income and deduct $3,500. That is the basic exemption the Canada Revenue Agency (CRA) gives. The net amount is called contributory earnings because your CPP contribution will be a percentage of this amount.

• CPP1: If your maximum pensionable earnings are $74,600 or lower, your CPP1 contribution will be 5.95% of the Contributory earnings, which is $71,100.
• CPP2: But if your income is between $74,600 and $85,000, your CPP2 contribution will be 4% of the surplus income up to $10,400 ($85,000 – $74,600).

Your total CPP contribution will be capped at $4,646.45, even if your income is above $85,000.

Scenario #1: Jacob has maximum pensionable earnings of $83,000, which means both CPP1 and 2 will be deducted.

His CPP1 will be 5.95% on $71,100 = $4,230.45

His CPP2 will be 4% on $8,400 ($83,000 – $74,600) = $336

Scenario #2: Maya has maximum pensionable earnings of $90,000, which means both CPP1 and 2 will be deducted.

Her CPP1 will be 5.95% on $71,100 = $4,230.45

Her CPP2 will be 4% on $10,400 ($85,000 – $74,600) = $416

Scenario #3: Anna has maximum pensionable earnings of $70,000, which means only CPP1 will be deducted.

Her CPP1 will be 5.95% on $66,500 ($70,000 – $3,500) = $3,956.75

Building an alternative CPP

The CPP enhancement will increase your CPP payout by up to 50% if you max out CPP1 and 2 contributions for 40 years. Even then, it will be able to meet one-third of your income needs.

You don’t have control over how much you can contribute and withdraw from CPP. What you can control is when to take a payout, after age 60 and before age 70.

• Even there, if you choose to take the payout before age 65, it will be reduced by 0.6% per month up to 36% for 60 months.
• If you delay the payout above age 65, it will increase by 0.7% per month up to 42% for 60 months.

While contributing to CPP, you can also invest $4,700 annually to create your pension portfolio and increase the investment by 5% annually. If you have a 15- to 20-year investment horizon, consider investing in growth stocks to build wealth. Keep withdrawing profits from growth stocks at regular intervals and invest in safer dividend stocks.

Stocks to invest in for the long term

You could consider investing $4,700 in Topicus.com (TSXV:TOI), which is trading near its 52-week low because of a management change at parent Constellation Software. The company could see a cyclical downturn in 2026 as tech stocks correct from the artificial intelligence (AI) rally.

However, the company’s compounding model remains unaffected. Topicus.com has completed a major acquisition, and its impact on the cash flows will be visible in the first quarter of 2026. The debt level has increased, and the amortization of acquired assets has reduced earnings in the short term. However, the recurring cash flow from these acquisitions will help it reduce debt and acquire more companies, compounding cash flow and earnings in the long term.

Topicus.com is a stock to buy the dip and sell when the stock surges 40-50%, as that is its cyclical range. If you invest $2,000 in Topicus.com and it becomes $3,000, you can book a profit of $1,000 and invest in dividend stocks like Enbridge or CT REIT and earn inflation-adjusted dividend income.

The post Here’s the CPP Contribution Your Employer Will Deduct in 2026  appeared first on The Motley Fool Canada.

More reading

• If I Had $10,000 to Invest in Canadian Stocks Today, Here’s What I’d Buy
• Got $5,000? 5 Tech Stocks to Buy and Hold for the Long Term
• Could This $97 TSX Stock Be Your Ticket to Millionaire Status?
• The Top Canadian Stocks to Buy Right Away With $40,000

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

Who says retirement is the end of work? With time on your hands, you can take up full-time investing, studying the financial reports and the markets, tracking the performance of the companies you invest in, and managing your portfolio. There is a notion that retirees should only invest in income-generating stocks where their returns are predictable.

There are ETFs, seasonal stocks, high-yield dividend stocks, high-dividend growth stocks, and opportunistic growth stocks that retirees would absolutely love. While your pension and dividend income meet your daily needs, you could set aside a small amount in your portfolio for slightly riskier investments that you can stay invested in for three years.

Three stocks retirees should absolutely love

Opportunistic growth stock

Descartes Systems (TSX:DSG) is an opportunistic growth stock that retirees would love to hold. Trade volumes have dipped due to the US tariff war. They are expected to increase in 2026 due to supply chain shifts. Higher trade volumes will convert into organic revenue growth as Descartes offers single or multiple solutions, even for a single trade consignment.

It maintained its profit margins and revenue growth in 2025, driven by acquisitions and strong demand for trade intelligence and transport management solutions. Next year could see a return of trade volumes, driving demand for more solutions.

The 2025 correction was needed as the stock was overvalued in 2024, trading at a 73 times price-to-earnings (P/E) ratio, which is high for a company with 22% earnings per share (EPS) growth. The P/E ratio has corrected to 50 times and the forward P/E to 29 times. If EPS growth accelerates from trade recovery, Descartes’s share price could rally 40% to reach the previous high of $175. An investment for two years could grow your money by 50%.

High dividend growth stock

Canadian Natural Resources (TSX:CNQ) is a stock retirees would love, as the 7.6% dip in the share price in December has inflated the dividend yield to 5.4%. The company has been growing dividends by 2% and 50% for the last 25 years. In 2025, it adopted a new free cash flow (FCF) policy as it increased its debt to acquire more reserves. The company will focus on reducing net debt from $17.2 billion to $12–$15 billion by redirecting 40% of the FCF on debt repayment.

The dividend growth may slow to mid-single-digits in 2026 from 9.9% in 2025. However, dividend growth would accelerate in the coming years as the company reduces debt and share count through share buybacks.

A safe ETF to get market-linked returns

A market ETF is a perfect investment to tap into a recovery rally. The BMO S&P/TSX 60 Index Series Units ETF (TSX:ZIU) tracks the TSX 60 Index. The ETF has surged 24% so far in 2025 as energy, technology, and gold mining stocks outperformed and pushed up the overall index. The ETF could give a strong double-digit return in 2026 as tariff-affected stocks revive and construction picks up with the help of the government’s support for the nation-building budget.

Since the ETF is replicating the index, the management ratio is low at just 0.15%. You could consider investing in market ETFs even as a retiree.

How retirees should invest in the above stocks

Except for Canadian Natural Resources, the growth stock and market ETF give returns through capital appreciation. Retirees can invest $10,000 in each of the two stocks and withdraw the profits whenever the capital appreciates by 20–25%. So, if your $10,000 investment in Descartes grows to $12,500, you can sell shares worth $2,500 and retain the $10,000 investment. However, for 2026, you might want to wait for a 50% uptick before you cash out a profit.

Such investments can give you a high annual bonus when the market performs. However, there could also be periods of negative growth. Thus, you should have the flexibility to hold for three years, giving the stock time to recover from the negative growth.

The post 3 Stocks Retirees Should Absolutely Love appeared first on The Motley Fool Canada.

More reading

• 3 Dividend Stocks Worth Having in Every Canadian’s Portfolio
• Canadian Companies With a Track Record of Consistently Raising Their Dividends
• The Simplest and Most Effective TFSA Strategy to Kick Off 2026
• 2 Energy Dividend Stocks That Look Worth Picking Up Right Now
• The Canadian Stocks I’d Consider Most If I Had $10,000 to Invest in 2026

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Natural Resources and Descartes Systems Group. The Motley Fool has a disclosure policy.

Retirement can be difficult as your active source of income reduces. Your active income may not vanish, as you can continue working in consulting roles or take on investing as full-time work. However, what you need is passive income that can take care of your daily expenses, as other sources of income may be volatile. Investing in high-yield dividend stocks can automate your expense management. A Tax-Free Savings Account (TFSA) is a great source of tax-free passive income.

Two high-yield dividend stocks for retirees

The dividend yield is the annual dividend per share as a percentage of the share price. High-yield is often associated with high risk as the stock price falls due to short-term headwinds. However, a few dividend stocks have a strong history of paying regular dividends.

SmartCentres REIT

SmartCentres REIT (TSX:SRU.UN) is one such stock. It has a 23-year history of paying regular monthly dividends, one of the longest among the Canadian REITs. In the last 21 years, the REIT has withstood the 2008 Financial Crisis, the 2020 pandemic, and the 2022 real estate bubble. It’s not that SmartCetres was unaffected. In fact, its distribution payout ratio surpassed 95% in 2024. The reason was the falling fair market value of properties, making it difficult for SmartCentres to sell its residential properties.

However, the REIT withstood all crises and recovered its ratios. Its strength is its tenant Walmart, from which it earns 25% of rental income, and the grocery-anchored stores that keep occupancy above 90%. The REIT doesn’t increase dividends annually but has a 7.1% yield. It intensifies the area near its stores by building mixed-use properties that help it charge higher rent and secure capital gains from time to time by selling those properties.

Even renting an apartment carries the risk of non-occupancy and the tenant defaulting on rent. However, you can expect SmartCenters to give you a stable payout every month in every economic situation.  

Telus stock

Telus Corporation (TSX:T) is another stock with a 23-year history of paying dividends and growing its dividends in the last 21 years. The share price is trading near its 2013 level as high leverage on its balance sheet and strong competition keep investors bearish. However, Telus’s stable cash flows and strategy to expand in new markets on competitors’ networks will keep dividends coming. Now is a good time to lock in a 9.3% yield in your TFSA.

Telus is focused on reducing its debt, which could ease the interest expense burden and increase free cash flow. The company has integrated Telus Digital to strengthen its service offerings with artificial intelligence and Telehealth. T has paused its dividend growth and is phasing out the discounted dividend reinvestment plan to reduce leverage. However, it will continue to pay the current dividend per share of $1.64.

How much dividend income can retirees earn from the above stocks

A 7% and 9% yield are significantly better than the 3.5% interest from Guaranteed Investment Certificates. While the above dividend stocks carry equity risk, the downside risk is low as they trade at a cheap valuation.

If you buy 1,000 shares of the two stocks, you can get $3,524 in tax-free passive income in 2026 for a total investment of $44,860.

The post Retirees: 2 High-Yield Dividend Stocks for Solid TFSA Passive Income appeared first on The Motley Fool Canada.

More reading

• Is TELUS’s Dividend Still Worth Counting On?
• 4 TSX Stocks to Buy if the Economy Slows but Doesn’t Break
• How Splitting $30,000 Across Three TSX Stocks Could Generate $2,092 in Annual Dividends
• A Monthly-Paying TSX Stock With a 6.6% Dividend Yield
• 2 Beaten-Down Dividend Titans Worth Considering Right Now

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