Most 35-year-old Canadians have built modest retirement savings, but the gap between where they are and where they need to be reveals an opportunity.
By age 35, the typical Canadian has socked away roughly $15,186 in their TFSA (Tax-Free Savings Account) and $82,100 in their RRSP (Registered Retirement Savings Plan). These numbers tell an important story about how Canadians approach retirement planning in their mid-30s.
The gap between these two accounts makes sense. RRSPs have been around since 1957, while TFSAs only launched in 2009. Many Canadians also prioritize RRSPs because contributions reduce taxable income immediately, providing an attractive short-term benefit during peak earning years.
However, it’s essential to contribute strategically to these accounts to accelerate your wealth-building journey.
Does the TFSA deserve more attention?
While the RRSP lowers your taxable income, any returns earned in the TFSA are exempt from taxes. TFSA holders pay no tax on withdrawals, dividends, or capital gains.
Compare that to an RRSP, where each withdrawal gets taxed as income. If you retire in a higher tax bracket than expected, that tax bill can sting.
The TFSA also offers greater flexibility than RRSPs. For instance, you can withdraw from a TFSA anytime without penalties or tax consequences.
The RRSP still matters
Despite the TFSA’s advantages, RRSPs remain crucial for most Canadians. It makes sense to maximize RRSP contributions if you are in a high tax bracket now and expect to be in a lower one during retirement.
RRSPs also force discipline. Once money goes in, it’s meant to stay until retirement. That removes the temptation to dip into your savings for non-emergencies.
The key is to use both registered accounts, not choose one over the other.
Building passive income inside tax-sheltered accounts
At 35, you likely have 30–35 years until retirement. That’s enough time for you to benefit from the power of compounding, especially if you focus on income-generating investments.
Dividend-paying stocks are perfect for both TFSAs and RRSPs. Companies that consistently pay and grow dividends provide a steady stream of income that can be reinvested to purchase additional shares.
In a TFSA, those dividends compound tax-free. In an RRSP, they grow tax-deferred. Either way, you avoid the annual tax drag that kills returns in regular investment accounts.
Consider a stock like Thomson Reuters (TSX:TRI). Valued at a market cap of almost $68 billion, the Toronto-based information giant operates in five segments, including legal research, tax and accounting software, and Reuters News.
The company has evolved from traditional publishing into a technology powerhouse serving professionals who need mission-critical information. Thomson Reuters pays steady dividends and has shown resilience across economic cycles, making its services recession-resistant.
More importantly, Thomson Reuters is investing heavily in artificial intelligence to enhance its research and workflow products. CEO Steve Hasker has been clear about making AI a core part of every product offering, from legal research to tax compliance.
That combination of steady dividends plus growth potential makes it attractive for long-term retirement accounts.
The real opportunity at 35
If you’re 35 with $15,000 in your TFSA and $82,000 in your RRSP, you’re not behind. You’re actually ahead of many Canadians your age. But you’re also at a crucial decision point. The choices you make over the next decade will largely determine your retirement lifestyle.
Max out your TFSA contribution room while you can. The annual limit for 2026 is $7,000, and unused room carries forward. If you haven’t contributed since TFSAs launched, you could have over $100,000 in available contributions. Also, keep contributing to your RRSP, especially if your employer matches these amounts.
Most importantly, focus on quality investments that generate growing income streams. Dividend stocks, real estate investment trusts, and index funds that distribute regular payments all work well in tax-sheltered accounts.
The average balances at 35 are just a starting point. What matters more is what you do from here.
