The 2026 Tax-Free Savings Account (TFSA) contribution room is out, and you just got another $7,000. Congrats. Personally, I try to contribute as early in the year as possible to give that money more time in the market. The problem is that many Canadians still aren’t using their TFSA nearly as effectively as they could.
That shows up clearly in Statistics Canada data. A 2024 report breaking down TFSA usage by age and gender shows that for Canadians aged 40 to 44, the average TFSA fair market value in 2022 was just $17,604. For millennials and older Gen X investors, that’s not great. If you’re anywhere near this range, there are a few good reasons the TFSA deserves to be a higher priority.
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Why a TFSA?
The TFSA is one of the most flexible investment accounts available to Canadians. Contribution room increases most years and tends to rise over time with inflation. Any growth inside the account is tax-free, and withdrawals are also tax-free. There are no income requirements to use it, and no penalties or restrictions on when you can take money out.
That flexibility is what separates it from other registered plans. A Registered Retirement Savings Plan (RRSP) offers a tax deduction on contributions, but withdrawals are fully taxable and often come with withholding tax. The First Home Savings Account (FHSA) is powerful if you are buying a first home, but it is purpose-built and more restrictive. With a TFSA, you can withdraw money at any time for any reason, and the amount you take out is added back to your contribution room in a future year.
The name can be misleading. Despite being called a “savings” account, it is usually not ideal for holding plain cash long term. Its real strength comes from holding investments that can grow or generate income over time without triggering tax.
What to buy in your TFSA at age 44
At age 44, assuming a retirement age of around 65, you still have 20 years or more to invest. That argues for a growth-oriented portfolio, but not necessarily an all-equity approach like a younger investor might use. One option that fits this middle ground is iShares Core Growth ETF Portfolio (TSX:XGRO).
This is an all-in-one asset allocation exchange-traded fund that holds about 80% in global stocks and 20% in bonds. The equity portion is diversified across Canada, the United States, international developed markets, and emerging markets, while the bond sleeve helps reduce volatility and boosts income slightly.
XGRO is also very cost-efficient. Its management expense ratio is 0.20%, which means a $10,000 investment costs roughly $20 per year in fees. Compared to many bank mutual funds that still charge close to 1%, that difference compounds meaningfully over time. The fund is automatically rebalanced, making it a simple set-it-and-forget-it option for TFSA investors in their 40s.
