Canadians: Here’s How Much You Need in Your TFSA to Retire

Retirement sounds like a giant number until you break it down. In 2026, Canadians can add another $7,000 to a Tax-Free Savings Account (TFSA), and anyone who has been eligible since 2009 and never contributed could now have as much as $109,000 of room. That alone won’t fund retirement, but smart investing can do a lot of heavy lifting.

BMO’s latest survey found Canadians now think they need about $1.7 million to retire comfortably. Still, a TFSA doesn’t need to cover every dollar on its own. A simple way to think about it is this: if you want roughly $40,000 a year in tax-free portfolio income, you likely need close to $1 million invested at a 4% yield. So let’s look at some stocks that could help.

CU

Canadian Utilities (TSX:CU) owns regulated utility and energy infrastructure assets through electricity, natural gas, storage, and pipelines. Over the last year, the big story has been growth tied to regulated assets, especially in Alberta. Its Yellowhead Pipeline moved closer to construction, and management said the project is now 100% contracted.

Canadian Utilities reported 2025 adjusted earnings of $658 million, or $2.42 per share, up from $647 million, or $2.38 per share, in 2024. The company also pointed to a five-year consolidated rate base growth path that implies $17.9 billion in 2026 and $23.2 billion by 2030. With the stock recently around $48 and a forward dividend yield near 3.8%, investors are paying about 19 times adjusted earnings for a defensive business with visible capital plans. It’s not a rocket ship, and that’s the point. The main risk is that utility growth can look slow, and large projects still need approvals and execution.

BIP

Brookfield Infrastructure Partners (TSX:BIP.UN) offers a different flavour of retirement stock. Instead of one region or one utility model, it owns infrastructure around the world across utilities, transport, midstream, and data. That mix has looked especially useful over the last year as demand for digital infrastructure and essential networks stayed strong. Brookfield also kept doing what income investors like best: raising the payout again. In January, it announced its 17th consecutive annual distribution increase.

Brookfield generated $2.6 billion in funds from operations (FFO) in 2025, or $3.32 per unit, with record fourth-quarter FFO of $0.90 per unit. Management also said normalized FFO per unit rose 10%, and it lifted the annualized distribution to $1.82 per unit for 2026. With units recently near $50, that puts the yield around the 5%, and the valuation at 40 times trailing earnings. That feels reasonable for a global infrastructure name with built-in inflation protection and long-term growth targets.

GWO

Finally, Great-West Lifeco (TSX:GWO) runs insurance, wealth, and retirement businesses through Canada Life, Empower, and Irish Life. Over the last year, it kept leaning into the parts of the business that throw off durable earnings, especially wealth and retirement. Furthermore, Great-West gave investors a clear sign of confidence in February when it announced a 10% dividend increase.

Great-West reported record 2025 base earnings, with fourth-quarter net earnings of $1 billion and strong momentum at Empower, where retirement generated US$23 billion in net plan flows in 2025. Base return on equity (ROE) climbed to 20.1%, and the LICAT (life insurance capital adequacy test) ratio ended the year at 128%, which shows solid capital strength. With the stock recently at about $63, a price-to-earnings (P/E) of 14.8, and a forward dividend of $2.50 for a yield near 4%, Great-West looks like a balanced retirement holding rather than a flashy bet.

Bottom line

So, how much do you need in your TFSA to retire? More than the contribution room alone, but a less daunting amount than many people think. A well-built TFSA full of reliable dividend growers like CU, BIP.UN, and GWO can turn steady contributions into meaningful tax-free income over time. Especially when investing even that $7,000 in each.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTCU$47.78146$1.84$268.64Quarterly$6,975.88GWO$63.31110$2.50$275.00Quarterly$6,964.10BIP.UN$50.31139$2.49$346.11Quarterly$6,992.09

You likely won’t retire on one great deposit. You will retire on years of smart ones.

The post Canadians: Here’s How Much You Need in Your TFSA to Retire appeared first on The Motley Fool Canada.

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More reading

• 4 TSX Stocks to Buy if the Economy Slows but Doesn’t Break
• The Canadian Stocks I’d Hold in a TFSA and Never Feel the Need to Sell
• The Canadian Blue-Chip Stocks I’d Use to Build Lasting Long-Term Wealth
• 2 Canadian Stocks That Offer Both Growth and Dividends in One Portfolio
• 3 Canadian Utility Stocks Worth Having on Your Radar for Steady Income

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.