As retirement approaches, one of many greatest challenges is producing sufficient earnings to cowl bills with out dropping useful authorities advantages. For Canadians, the Outdated Age Safety (OAS) pension could be diminished by a clawback if taxable earnings will get too excessive. That’s the place the Tax-Free Financial savings Account (TFSA) is available in. Inside that TFSA, a dependable month-to-month earnings inventory like Alternative Properties REIT (TSX:CHP.UN) could make an enormous distinction.
An ideal pairing
The TFSA is likely one of the greatest instruments obtainable to retirees. It allows you to develop investments tax-free, and all withdrawals, whether or not earnings or capital, don’t depend towards your taxable earnings. Meaning you may take pleasure in common funds with out affecting income-tested advantages like OAS. In case your web earnings goes above $87,645 in 2025, the federal authorities will begin to scale back your OAS by $0.15 for each additional greenback. So, for anybody near that threshold, it is smart to maintain income-generating investments inside a TFSA.
Now, let’s speak about Alternative Properties. That is one among Canada’s largest actual property funding trusts (REITs). It holds a diversified portfolio of retail and industrial properties, most of that are anchored by grocery shops and important companies. Loblaw is its greatest tenant, a bonus throughout occasions of financial stress. Its market cap sits round $10.6 billion, and it has lengthy been a go-to for month-to-month dividend earnings.
The numbers
As of June 2025, Alternative Properties pays a month-to-month dividend of $0.06417 per unit. That works out to $0.77 yearly. With the share worth hovering round $14.50, that offers buyers a yield of about 5.3%. And since it pays month-to-month, it helps clean out your earnings and align with month-to-month bills. It’s a comforting choice when payments roll in each few weeks. In reality, for those who took the utmost OAS cost between 65 and 74 and invested it, right here’s what that may appear like.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| CHP.UN | $14.50 | 601 | $0.77 | $462.77 | Month-to-month | $8,723.52 |
The dividend inventory continues to carry out steadily. In its newest earnings report for the primary quarter of 2025, income got here in at $372.5 million, barely up from the identical time final yr. Web earnings was $274.3 million, and funds from operations, a key REIT metric, have been sturdy sufficient to cowl the dividend with room to spare. Alternative Properties has maintained a wholesome payout ratio, round 45%, based mostly on funds from operations, which suggests the dividend is sustainable.
Extra to return
The REIT’s portfolio stays in fine condition. It holds over 700 properties, with 97% occupancy and a median lease time period of almost 10 years. The dividend inventory is targeted on high-traffic city areas, which provides stability to rental earnings. As a part of its ongoing development technique, it continues to develop new mixed-use and industrial tasks. These efforts present long-term worth and assist offset inflation.
The actual benefit for retirees comes whenever you maintain Alternative Properties in a TFSA. As a result of the earnings is tax-free, you received’t see your web earnings rise the best way you’d with dividends in a taxable account. Meaning no affect in your OAS, no added tax burden, and no disagreeable surprises at tax time. Plus, the month-to-month nature of the payout makes budgeting simpler.
Backside line
After all, there are dangers. Actual property values and rates of interest can affect REIT efficiency. If charges rise considerably, borrowing prices improve, and that may have an effect on profitability. Retail properties additionally carry some danger if tenant gross sales decline or lease charges soften. Nonetheless, with Loblaw as its anchor tenant and long-term leases in place, Alternative Properties has extra stability than many others within the house.
For retirees seeking to protect their OAS and nonetheless generate a robust, dependable earnings, Alternative Properties is a standout choice. A 5.3% yield, month-to-month funds, and regular efficiency make it splendid for a TFSA. And by preserving earnings tax-free, it helps shield extra than simply your portfolio; it helps shield your advantages, too. In retirement, peace of thoughts counts simply as a lot because the payout. And with a reputation like Alternative Properties in your TFSA, you may take pleasure in each.
