Here's the Average Canadian TFSA and RRSP at Age 25

Here’s the Average Canadian TFSA and RRSP at Age 25

Are you not meeting the average? Then check out this ETF that can bridge the gap.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published April 11, 2025 4:30 pm EDT

Are you turning 25? It’s a big year for your money! You’ve got tools like the Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP). Let’s see how to use them wisely. One great option is Vanguard FTSE Global All Cap ex Canada Index ETF (TSX:VXC) — one ETF that is like a ticket to investing all over the world!

coins jump into piggy bank — Source: Getty Images

First, what are 25-year-olds up to?

What are other young Canadians doing with their money? Statistics Canada says Canadians under 35 had around $10,720 in regular savings in 2019. They also had about $8,395 in their TFSAs and $9,905 in their RRSPs. These are just averages, though. Everyone’s money situation is different, of course.

Yet, if you want your TFSA and RRSP to grow, investing in a mix of things is smart. Vanguard FTSE Global All Cap ex Canada Index ETF does just that. It follows a big index of stocks from around the world, but not Canada. So, you get a piece of companies in other developed countries and those in emerging markets. This helps spread out your risk, so if one country’s market isn’t doing great, your whole investment won’t take a huge hit.

As of writing, one unit of VXC was worth $57.38. The price-to-earnings (P/E) ratio was 18.09. It also paid a dividend, giving a yield of 1.41%. The management expense ratio (MER) was 0.22%. This is the small fee you pay to have the fund managed, worth its weight in gold. In the year ending Dec. 31, 2024, VXC had a total return of 26.2% after all the fees. That’s pretty good for this ETF! It was just a little bit less than the index it follows, which returned 27%.

A perfect pairing

Putting VXC in your TFSA or RRSP has tax perks. With a TFSA, any money your investments make and any money you take out later is tax-free. That’s a sweet deal for long-term savings! If you put money into an RRSP, you get to deduct that amount from your taxable income for the year. Your investments then grow without you having to pay tax on them until you take the money out in retirement, at which point it’s taxed as income.

Starting to put money away early, even small amounts regularly can really add up over time. For example, if you put $200 into your TFSA or RRSP each month and invest it in something like VXC, it could grow quite a bit over the years, thanks to compound interest. That’s like your money making more money! Doing this consistently can help you build a strong financial base for the future.

Bottom line

So, while those average savings numbers give you an idea of where some Canadians your age are, your money journey is your own. By looking at investment options like Vanguard FTSE Global All Cap ex Canada Index ETF within your TFSA or RRSP, you’re taking smart steps towards your financial goals. The key things to remember are to start early, contribute regularly, and keep learning about your investments.

VXC gives you a simple way to invest in the growth of companies all around the world without having to pick individual stocks. It’s like having a little piece of many different businesses working for you! And by using your TFSA or RRSP, you’re making your money grow in a tax-smart way, which can make a big difference in the long run. So, take those first steps, stay curious, and build that financial future!