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Yahoo
12 hours ago
- Business
- Yahoo
The Best Approach for Your $7,000 TFSA Contribution This Year
Written by Andrew Walker at The Motley Fool Canada Volatile market action has self-directed Tax Free Savings Account (TFSA) holders wondering which investments might be good to buy right now for a retirement portfolio focused on income and long-term total returns. The TFSA limit is $7,000 in 2025. This brings the cumulative maximum lifetime TFSA contribution space to $102,000 for anyone who has qualified since the creation of the TFSA in 2009. Interest, dividends, and capital gains earned inside the TFSA are all tax-free. This means the full value of the earnings can go straight into your pocket or reinvested. TFSA income is not counted toward the net-world income calculation used by the CRA to determine the Old Age Security (OAS) pension recovery tax, or OAS clawback, as it is otherwise known. That is important to consider for seniors who receive OAS and have high-income levels. Non-cashable Guaranteed Investment Certificate (GIC) rates are currently available in the 3% to 3.75% range, depending on the term and the financial institution. That's down from the 5% to 6% investors were able to get in late 2023 but is still comfortably above the current rate of inflation. Markets are at record highs, and tariffs threaten to trigger a global recession, so it makes sense to put some of the TFSA funds into GICs. Dividend stocks can provide better yields, but they come with capital risks. Share prices can slip below the purchase price, and dividends might get cut if a company gets into financial trouble. However, stocks that have good track records of increasing their dividends are worth considering, as each dividend hike raises the yield on the initial investment. Enbridge (TSX:ENB) is a good example of a reliable dividend-growth stock. The company raised its dividend in each of the past 30 years. The stock is up about 28% in the past year but has pulled back a bit from the 2025 highs. Investors who buy ENB at the current price can get a dividend yield of 6%. Enbridge grows through a combination of acquisitions and internal projects. The company spent US$14 billion in 2024 to buy three natural gas utilities. Revenue from these rate-regulated assets tends to be predictable and reliable. Other acquisitions in the past few years include an oil export terminal in Texas and renewable energy developer for wind and solar projects. In addition, Enbridge is a partner in the Woodfibre liquified natural gas (LNG) export facility being built in British Columbia. Natural gas demand is expected to rise in the coming years as new gas-fired power generation facilities are built to provide electricity for AI data centres. Enbridge's gas transmission, storage, and utility assets put it in a good spot to benefit. On the development side, the $28 billion capital program will drive earnings and cash flow higher in the next few years. This should support steady dividend increases. Investors with some cash to put to work in a TFSA can quite easily build a diversified portfolio of GICs and dividend stocks to get an average yield of 4% to 5% today. The strategy reduces capital risk while boosting average returns and provides an opportunity to generate long-term capital gains. The post The Best Approach for Your $7,000 TFSA Contribution This Year appeared first on The Motley Fool Canada. More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker has no position in any stock mentioned. 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CBC
27-03-2025
- Business
- CBC
Poilievre's business plans gain Conservatives another endorsement
Conservative Leader Pierre Poilievre is the first federal party leader to campaign in the Lower Mainland. Poilievre announced plans to increase the Tax Free Savings Account limit by an extra $5,000 a year for investments into Canadian companies. Chris Gardner is the CEO of the Independent Contractors and Businesses Association, which was endorsing the Conservative Party earlier this year. Gardner says Poilievre's plans are what companies need.
