While you shift from constructing wealth to residing off it, the dialog modifications. It’s now not nearly progress in any respect prices.
The main target turns to dependable money movement, sufficient to complement Canada Pension Plan (CPP), Previous Age Safety (OAS), and any Registered Retirement Revenue Fund (RRIF) withdrawals — with out continually worrying about promoting shares on the improper time.
For traders who desire a predictable month-to-month earnings, one long-standing possibility within the Canadian market is Canoe EIT Revenue Fund (TSX:EIT.UN). It’s not new, not flashy, and never constructed on unique derivatives.
Nevertheless it has been round for years doing one factor constantly: paying a month-to-month distribution of $0.10 per share like clockwork. Right here’s how you would use it to focus on $2,000 per 30 days in earnings.
What’s EIT.UN?
EIT.UN is a closed-end earnings fund targeted on producing constant money movement. It holds an actively managed portfolio of dividend-paying equities, roughly break up between Canadian and U.S. shares. The mandate is earnings first, capital appreciation second.
In contrast to a conventional exchange-traded fund (ETF) that merely tracks an index, EIT.UN is actively managed. The portfolio supervisor can shift allocations, trim positions, and lift money when mandatory. The fund can be permitted to make use of leverage of as much as 1.2 instances belongings. In easy phrases, for each $100 invested, as much as $20 may be borrowed and invested to boost earnings.
Leverage will increase yield potential — however it additionally will increase draw back threat in unstable markets. This isn’t a assured earnings product. It’s nonetheless equity-based and can transfer with markets. The administration payment is 1.1%, excluding borrowing prices.
The passive-income math
EIT.UN at present trades at $16.87 per unit. The fund pays a $0.10 month-to-month distribution per unit, or $1.20 yearly.
To generate $2,000 per 30 days, you would want: $2,000 ÷ $0.10 = 20,000 models.
At $16.87 per unit: 20,000 × $16.87 = $337,400 invested.
That funding would produce $24,000 yearly, paid in 12 month-to-month installments of $2,000.
Inside a Tax-Free Financial savings Account (TFSA), that full $2,000 per 30 days is tax-free. You’ll be able to reinvest it, withdraw it, or spend it with out triggering any tax reporting.
What about taxes exterior a TFSA?
If you happen to maintain EIT.UN in a non-registered account, the tax image turns into extra advanced.
Revenue funds don’t merely pay “dividends.” Their distributions generally is a mixture of eligible and non-dividends, overseas earnings, capital positive aspects, and return of capital.
Capital positive aspects are typically taxed at 50% of your marginal tax fee, which is usually extra beneficial than totally taxable curiosity earnings. Eligible dividends obtain the dividend tax credit score. Return of capital, when current, isn’t instantly taxable however reduces your adjusted value base, growing capital positive aspects once you finally promote.
For 2025, EIT.UN’s distribution breakdown was 95.01% capital positive aspects and three.99% eligible dividends. This could change yr to yr, so you should definitely test in December when tax data turns into accessible.
This combine may be tax-efficient — however it provides complexity. You’ll obtain a T3 slip, and the after-tax yield will rely in your private marginal tax bracket. In a TFSA, none of this issues. In a taxable account, it completely does.