Dividend Income Canada

[BigBangWeary]

Can any Canadian dividend experts on here give me a ballpark approximation of how much dividend income could be realistically generated from $600,000 CDN?

[daverobev]

The question makes no sense. It depends what you buy, and when.

For the sake of simplicity - if you bought entirely ZDV, BMO dividend ETF, you'd get about 4.5%

https://www.bmo.com/gam/ca/advisor/products/etfs#fundUrl=%2FfundProfile%2FZDV%23overview

So, $27k? Mostly tax free due to the divi tax credit, if you weren't earning other income.

ZDV only has 51 holdings, though. Much less risky than 'all on black', but riskier than a globally diverse portfolio.

I mean, if you bought $600k of Corus, you'd get $60k back a year!

[MMMdude]

If you buy XIU, the TSX index it is yielding approx 3% right now.  The basket of about 12 blue chips I have yields around 3.8%.  All the usual suspects.  Couple telcos, utilities, 4 of the big banks and some pipelines - say let's say 4% if you are yield focus or $24,000 per annum on 600K

REIT's typically yield between 5 and 6%.

All told my portfolio yields 3.2% at the moment as I have foreign exposure ETF that doesn't yield that much and also bond funds are well under 3% yield now.

[BigBangWeary]

Thank you, this is what I was looking for.

I am playing with a couple of scenarios, but the assumption would be a paid of house, and at least this much money used to generate income.

We may decide to work but would be keeping any earned income from part time work at less than $45,000 per year for tax efficiency.

[MMMdude]

Oh and as you probably know, Cdn div income is taxed very favorably....and it should be since that income was already taxed once at the corporate level.  Where I am in Alberta i can basically make 60Kish before paying a cent of tax on divy income if it was my only income

Only thing to be aware of is the 1.38 gross up on each dollar of dividend income as this is what the dividend tax credit is based on (the gross up amount).   Down the road, this could put you in OAS clawback territory which would be giving away free $....I don't know about you, but i aint giving the government any breaks.  You probably won't have to worry about that until you get to around the 35K dividend income mark which would gross up to approx $50K in taxable income.  That assumes you will also have some CPP + the OAS coming in and RRSP or RRIF withdrawals which would add up to the $67K mark where you need to start being careful before clawback.