Retire Rich: TFSA Stocks to Power Your Golden Years

The golden rule for retirement savings has shifted over the years, as the rate of inflation continues to put pressure on those with their eyes on a life after work. Financial advisors and/or planners often advise Canadians to aim to save 70-80% of their pre-retirement salary when they enter retirement. However, a good rule of thumb for the average Canadian is to aim for at least $1 million in total in your registered and non-registered accounts.

Today, I want to look at the best stocks to keep in our Tax-Free Savings Account (TFSA) as we look ahead to retirement. For our hypothetical, let’s assume we maxed out our pre-retirement TFSA by $88,000 in 2023. Let’s jump right in.

Here’s a green energy stock that will pay you monthly in your TFSA

TransAlta Renewables (TSX: RNW) is the first stock I want to keep in our TFSA. This Calgary-based company owns, develops, and operates renewable and natural gas-fired power generation facilities and other infrastructure assets in Canada, the United States, and Australia. Shares of this TSX stock jumped 13% month over month as of Wednesday, July 19. The stock is up 16% year to date in 2023.

This company released its first quarter (Q1) earnings of fiscal 2023 on May 5. Revenues fell to $119 million compared to $143 million last year. EBITDA stands for earnings before interest, taxes, depreciation, and amortization, and aims to provide a clearer picture of a company’s earnings. TransAlta posted adjusted EBITDA of $128 million – down slightly from $139 million last year.

Early July, TransAlta signed an agreement to acquire TransAlta Renewables for $1.3 billion. In the meantime, TFSA investors can enjoy a monthly dividend of $0.078 per share. That represents a very good 7% yield.

This top Canadian bank can help you retire rich

TD Bank (TSX:TD) is the second largest of the Big Six Canadian banks by market capitalization, behind only Royal Bank of Canada. Shares of this top bank stock rose 7.3% month over month ending July 19. However, the stock is still down 1.8% in the year-to-date period. Investors can see more of its recent performance using the interactive price chart below.

Investors saw TD Bank’s Q2 earnings in late May. The bank reported adjusted net income of $3.75 billion, or $1.94 per diluted share, in Q2 2023 compared to $3.71 billion, or $2.02 per diluted share, last year. TD Bank benefited from net income growth in its Canadian and United States Personal and Commercial Banking divisions. Higher interest rates in both countries bolstered its profit margins.

TD Bank stock currently has a favorable price-to-earnings ratio of 10. TFSA investors can also count on its quarterly distribution of $0.96 per share, which represents a solid 4.4% yield.

One more monthly income beast I’ll keep in our TFSA now

Northwest Healthcare REIT (TSX:NWH.UN) is the third and final stock I would suggest for Canadians planning to retire in their golden years. This real estate investment trust (REIT) owns and operates a global portfolio of high-quality healthcare real estate. I’m still excited about grabbing this low-value REIT in a TFSA today.

The REIT released its Q1 2023 earnings on May 12. Northwest reported revenue growth of 29% to $135 million with strong portfolio occupancy of 97%. Meanwhile, total assets under management increased 13% to $10.8 billion. Shares of this REIT are trading in attractive territory compared to its competitors. The REIT last paid a monthly distribution of $0.067 per share, representing a monstrous 11% yield.