A $7,000 Tax-Free Savings Account (TFSA) investment can be one of the best ways to jumpstart retirement savings. In fact, it could generate about $538 in annual passive income from one Canadian stock. That works out to nearly $45 every month, with the income and future growth sheltered from Canadian tax. Retirement savings suddenly feel a little less sleepy.
Why the TFSA works
The 2026 TFSA dollar limit is $7,000, although investors may have additional unused contribution room carried forward. Income earned inside a TFSA also won’t affect federal income-tested benefits, including Old Age Security (OAS).
That creates an ideal home for high-yield investments, especially when their payments would receive less favourable tax treatment outside the account. Still, a large yield only helps retirement savings when the company can continue supporting it.
That brings us to Atrium Mortgage Investment Corporation (TSX:AI). Despite the ticker, this isn’t an artificial intelligence company. Atrium is one of Canada’s largest non-bank mortgage lenders, serving real estate borrowers in major urban markets across Ontario and Western Canada.
How Atrium makes money
Atrium lends primarily against residential and commercial real estate, then collects interest and fees from its mortgage portfolio. As a mortgage investment corporation, it distributes its taxable income to shareholders rather than paying corporate income tax on that income.
Those distributions are generally treated as interest income outside a registered account, making the TFSA particularly useful. Atrium currently pays $0.0775 per share each month, equal to $0.93 annually and a yield of about 7.7% at writing.
Can the dividend last?
AI stock earned $0.25 per share during the first quarter, enough to cover the $0.2325 in regular dividends paid across those three months. That coverage isn’t enormous, but mortgage investment corporations are designed to distribute most of their income rather than retain it.
The loan book also looks relatively conservative for a non-bank lender. First mortgages made up 95.3% of the portfolio, while the average loan-to-value ratio sat at 61.4%. That gives AI stock a buffer if property values weaken, although no lender gets to skip the credit cycle entirely.
Growth could come from outside its traditional markets. AI stock opened an Alberta office to expand into the Prairies, giving the company another source of potential loan originations while reducing its geographic concentration.
What $7,000 could generate
A $7,000 investment at $12.10 would purchase 578 full shares. That position could generate $44.80 each month, or $537.54 annually, assuming the regular dividend remains unchanged.
AI stock has also declared year-end special dividends every year since its TSX listing, including $0.10 per share for 2025. Investors shouldn’t count on a special payment, but it can provide an extra boost when taxable income exceeds the regular distributions.
The risk
AI stock faces real estate and credit risk. Borrower defaults, falling property values, or weaker loan demand could reduce earnings, while declining mortgage rates may lower the return earned on new loans. AI stock also trades at roughly 12 times 2025 earnings, which looks reasonable rather than deeply discounted.
That makes diversification important when building a portfolio of Canadian dividend stocks. AI stock can supply meaningful income, but it shouldn’t carry an entire retirement plan alone.
Bottom line
AI stock combines a 7.7% yield, monthly payments, conservative mortgage underwriting, and the possibility of additional year-end income. TFSA investors comfortable with real estate credit risk could turn one annual contribution into more than $500 of tax-free passive income, then reinvest those payments while retirement remains years away.
