Retirees: 3 Hacks to Make $379 Per Month in Retirement

Thinking about retirement can give you goosebumps. No active source of income can keep you on a tight budget if any unplanned expenses pop up. While being retired means saying goodbye to your full-time job, it doesn’t have to be saying no to having several sources of income. Since you have worked all your life and saved up money, it is time you put that money to use and spend your free time managing that money. Here are some hacks you can use to earn monthly passive income. 

How can retirees earn monthly passive income

The Canada Revenue Agency (CRA) has an age limit of 70 for Registered Retired Savings Plan (RRSP) but no age limit for Tax-Free Savings Account (TFSA). The 2024 TFSA contribution limit is $7,000. If you invested regularly in the TFSA and have accumulated a sizeable amount, you can now convert it into passive income. 

The stock market is conducive for dividend investing as most Dividend Aristocrats are trading at their lows. If you rebalance your TFSA portfolio from a growth to an income portfolio right now, you can lock in a 7-9% dividend yield. 

Hack #1: Dividend stocks 

The first income hack is dividend stock Enbridge (TSX:ENB). Investing in it now can help you lock in an 8% yield. The pipeline company has a low-risk business model. Its 69 years of dividend-paying history with no dividend cuts gives you some assurance that the 8% income will come every year. While the company pays you a quarterly dividend, you can withdraw that quarterly amount in three monthly installments. 

A little over $20,000 investment now can buy you 442 shares of Enbridge that could pay a $3.66 dividend per share in 2024. For a one-time $20,000 investment, you can withdraw $134.8 per month. And if you are using your TFSA for withdrawals, you need not worry about paying tax on all those dividends. 

Hack #2: REITs 

Dividend stocks are profit-making companies, but REITs (real estate investment trusts) are investment trusts. They enjoy the status of a trust because they distribute most of their income as distributions. Slate Grocery REIT (TSX:SGR.UN) is at a sweet spot with a distribution yield of 9.66%. 

Even though it has a high yield, it is a relatively safer investment as the REIT has a portfolio of 117 properties in the United States, and its tenants are grocery stores. As you know, grocery stores don’t change locations much. With not much construction happening in America, Slate Grocery REIT has scope to increase rent. 

While the REIT doesn’t have decades of dividend-paying history like Enbridge, it does pay monthly distributions from the rental income it gets. As the rental income is in U.S. dollars, Canadian investors benefit when the U.S. dollar strengthens. 

A little over $20,000 investment now can buy you 1,688 shares of Slate Grocery REIT, which are expected to pay $163 per month in distributions. 

Hack #3: High-yield dividend stocks 

Even though you are retired, you can still take some risk and invest around $10,000 in a high-yield dividend stock like Timbercreek Financial (TSX:TF). It is a stock market equivalent to becoming a lender and earning interest on your money. You at least have liquidity in stocks. When you feel things are going south, you can sell the stock and cash out. 

Timbercreek Financial is a short-term lender that only gives mortgages to income-producing properties. It has a team to handle borrowers who are late on their payments. Its stock price has been falling because high interest rates slowed loan origination and increased credit risk. But this will change when interest rates fall. A $10,000 investment in this stock can help you lock in a $80.96 monthly payout. 

Bottom line

A total investment of $50,000 in the above three stocks can generate $378.9 per month from next month onwards without any hassle of cleaning and maintenance had you rented your house or garage space.