This ETF Yields 3.4% and Pays You Monthly: It’s a Smart One for Retirement Savings

If you’re looking to build your retirement savings with an investment that offers passive income and long-term growth potential, the iShares S&P/TSX Composite High Dividend Index ETF (TSX: XEI) is certainly worth considering.

In fact, it currently offers an annual yield of roughly 3.4% and pays its distributions monthly.

However, what makes it appealing for retirement savings is that those payments can be useful whether you need the income today or are still years away from retiring.

Because while you’re building your portfolio, reinvesting those distributions allows you to accumulate additional units and increase the income your investments can generate over time.

Then, once you retire, you can collect the cash to help cover your expenses.

So, here’s what makes XEI worth considering and why individual dividend stocks can still be useful alongside it.

A Canadian dividend ETF to buy and hold for years One of the biggest benefits of owning XEI is that it gives you exposure to roughly 75 Canadian dividend stocks without having to build that portfolio yourself.

However, how those investments are weighted is also important.

Its benchmark limits individual stocks to 5% and sectors to 30% at each quarterly rebalancing.

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