Finding that perfect mix of income-producing stocks to put into a lasting retirement fund isn’t some magic formula. It does, however, take time, some determination, and plenty of patience.
More importantly, it’s easier than you may think if you look at this trio of great options. You can start to build out that lasting retirement fund with just $7,000 in your TFSA.
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Here’s how to get started
The first thing you need is an anchor stock that can provide some defensive appeal. This is especially useful as when the market pulls back, the income will keep rolling in.
To meet that need, let’s look at Canadian Utilities (TSX: CU). Canadian Utilities is one of the largest utility stocks on the market. Utilities make great investments, especially in a lasting retirement fund, thanks to their reliable business model.
In short, utilities generate a stable revenue stream from providing utility services. Those services are backed by long-term regulated contracts that guarantee that revenue stream.
That revenue stream, in turn, provides an avenue for the utility to invest in growth and pay a very handsome dividend. In the case of Canadian Utilities, that dividend works out to a tasty 4.7% yield.
For investors with just $7,000 to start their lasting retirement fund, allocating $2,500 is all that’s needed. That amount will generate a couple of shares each year just through reinvestments. This will allow that investment to continue growing on its own.
Adding to that appeal is the fact that Canadian Utilities has provided annual upticks to that dividend for over 50 consecutive years without fail.
That alone makes this a top candidate for any lasting retirement fund.
Supercharge your income growth
Another fine example to consider right now is Telus (TSX: T). Telus is one of Canada’s big telecom stocks and represents another defensive stock with a juicy yield.
Telus generates a reliable revenue stream primarily backed by its subscriber-based business. That business, which comprises multiple segments, provides services to customers nationwide.
The telecom also enjoys a growing revenue stream stemming from its digital services group. That segment offers digital solutions to niche markets such as agriculture and healthcare.
Turning to income, Telus offers an insane 7.5% yield. This means that an initial investment of just $2,000 will earn enough income to generate a half-dozen shares each year through reinvestments alone.
That’s a lasting retirement fund option suitable for any portfolio.
And like Canadian Utilities, Telus has an established cadence, dating back over a decade, providing annual or better dividend increases.
Wrap up with this big bank stock
No mention of a portfolio comprising lasting retirement fund candidates would be complete without mentioning one of Canada’s big banks.
Today, the big bank stock to consider buying is Bank of Nova Scotia (TSX: BNS). Scotiabank is the third-largest of the big banks, with a larger international footprint than its peers.
That international presence generates the bulk of the bank’s growth, offering decent diversification from its domestic operations.
In recent years, the bank has shifted its growth focus away from higher-risk Latin American markets towards more mature North American markets such as Mexico and the U.S.
As a dividend stock to add to any lasting retirement fund, Scotiabank shines. The bank has paid out dividends for nearly two centuries without fail. Today, the yield on its quarterly dividend works out to a very appetizing 5.7%.
Allocating the last $2,500 of our initial $7,000 results in a generous dividend that once again allows for an annual reinvestment of a few shares.
Build your lasting retirement fund
The trio of stocks mentioned above can provide lasting retirement fund income on their own. Prospective investors should note that adding these investments to a TFSA adds additional benefits with respect to taxation.
For that initial $7,000 outlay, here’s how that portfolio stacks up.
| Company | Recent Price | Initial Investment | Shares Purchased | Dividend | Total Payout | Shares Reinvested |
| Canadian Utilities | $39.01 | $2,500 | 64 | $1.83 | $117.12 | 3.00 |
| Telus | $22.41 | $2,000 | 89 | $1.67 | $148.63 | 6.632 |
| Bank of Nova Scotia | $77.10 | $2,500 | 32 | $4.40 | $140.8 | 1.826 |
In my opinion, one or all of the above should be core holdings in any well-diversified portfolio.
Buy them, hold them, and watch your future income grow (thanks to reinvestments).
