Canadian traders are searching for methods to get early retirement earnings to enhance their Canada Pension Plan, Previous Age Safety, and firm pensions.

One common technique to construct retirement funds entails proudly owning high TSX dividend shares inside a self-directed Tax-Free Financial savings Account (TFSA) and Registered Retirement Financial savings Plan (RRSP) portfolio and utilizing the distributions to purchase new shares.

Energy of compounding

Every time a dividend cost is used to purchase new shares, the subsequent dividend cost is bigger, which may doubtlessly purchase much more shares, relying on the motion of the share worth. This impact is just like rolling a snowball to construct a snowman.

The influence on a portfolio is small at first, however over time, the method can flip a modest preliminary funding right into a significant financial savings fund, particularly when the corporate raises the dividend at a gentle tempo and the share worth drifts greater.

Fortis

Fortis (TSX:FTS) is an efficient instance of a high Canadian dividend-growth inventory. The board has elevated the dividend for 52 consecutive years, and administration intends to lift the dividend by 4% to six% yearly via at the least 2030.

That is the sort of steering dividend traders ought to search for, particularly within the present market situations the place share costs are excessive and the financial system might be headed for some turbulence amid ongoing tariffs and commerce battles.

Fortis grows via strategic acquisitions and inside growth initiatives. Within the third-quarter (Q3) 2025 earnings report, the corporate up to date its five-year capital plan. Fortis intends to speculate $28.8 billion in progress initiatives within the 2026 to 2030 timeframe. This can elevate the speed base from roughly $42 billion in 2025 to $58 billion in 2030. As the brand new property are accomplished and go into service, the increase to income and money circulate ought to assist the deliberate dividend will increase. Administration has different alternatives into account that might be added to this system to increase it past 2030.

Fortis has not accomplished a serious acquisition for a number of years. Falling rates of interest in Canada and the USA might set off a brand new wave of consolidation within the utility sector. Fortis has the scale and stability sheet energy to make a transfer if the fitting alternative emerges. The corporate lately monetized companies it owned in Belize and the Turks and Caicos to offer additional funding capability to pursue the expansion program.

Fortis operates $75 billion in utility property, primarily positioned in Canada and the USA. These embody energy era amenities, electrical energy transmission grids, and pure gasoline distribution utilities. Income from these companies is generally predictable and dependable.

The Canadian authorities is contemplating the development of a cross-country energy grid. If the undertaking goes forward, Fortis could be a great candidate to take part, given its experience on this sector.

The underside line

A $10,000 funding in Fortis inventory 25 years in the past could be price greater than $200,000 as we speak with the dividends reinvested. There is no such thing as a assure that the subsequent 25 years will ship the identical returns, however the technique of shopping for high TSX dividend shares and utilizing the distributions to accumulate new shares is a confirmed one for constructing long-term financial savings.

When you have some money to place to work, this inventory deserves to be in your radar.