The Tax-Free Savings Account (TFSA) contribution limit rose $7,000 in 2025. That is $7,000 that can grow without any tax implication. While it isn’t a huge amount, it is powerful.
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The TFSA can save you thousands of dollars
Just $7,000 compounded tax-free at a 10% annual average rate could be worth over $18,000 in 10 years. If $7,000 was compounded at a 10% average rate for 20 years, it could be worth as much as $47,000! If that same investment was made outside a TFSA, you could be liable for as much as an $8,000 tax bill. That’s a 20% deduction in your overall return.
This explains why the TFSA is such a critical tool to both beat inflation and build life-changing wealth. The TFSA is the best place to hold exceptional business that can create exceptional value for shareholders.
If you are looking for stocks like these, here are a few to contemplate holding in a TFSA.
WSP: A stock for a decade ahead
WSP Global (TSX:WSP) has soundly beat inflation over the past five and 10 years. Its stock is up 212% and 530%, respectively. Those are compounded annual growth rates (CAGR) of 25% and 20%, respectively.
WSP should continue to soundly beat inflation. It has built a global engineering, design, and advisory platform. Demand for solutions around energy, water, climate change, technology, and urbanization all provide decades of opportunities for a wide, integrated company like WSP.
In its recent quarter, net revenues rose 20%, and adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) increased 19%. Smart acquisitions continue to expand WSP’s geographic presence and grow its base of service expertise. Its backlog increased 16% to $16.6 billion.
This TFSA stock recently hit an all-time high. Its valuation is not cheap today. I would likely wait for a significant pullback before adding it to your TFSA. However, when the time is right, this is a great stock to add.
Descartes Systems: Own this TFSA stock to beat inflation in the long term
Another stock for your TFSA is Descartes Systems Group (TSX:DSG). Its stock is up 147% in the past five years and 740% in the past 10 years. That equates to compounded annual growth of 19% and 23%, respectively.
Descartes operates a logistic network that helps connect the global supply chain. It complements this with a mix of software applications that help with routing, telematics, e-commerce, and regulatory/compliance.
Once adopted, Descartes’s solutions are very sticky. It helps create operational efficiencies and saves customers money. Descartes has a high level of recurring revenue, and it earns very strong profit margins.
The company has a great acquisition strategy that has helped propel double-digit growth for more than a decade. The company has a super clean, cash-rich balance sheet that can provide ample support for acquisition growth.
This stock is never cheap. In fact, even compared to other tech stocks, it is quite expensive. However, it fetches a premium for its steady business model, strong profits, and predictable growth. Add this stock to your TFSA on major dips. It almost always pops back quickly.
