The maximum Tax-Free Savings Account, or TFSA, 2026 cumulative contribution limit currently stands at $109,000. Of course, your particular number depends on the year you turned 18, as this is when your TFSA contribution room starts to accumulate. But for 45 years olds, your TFSA limit is the full $109,000. That’s the good news!
But unfortunately, many are finding it difficult to maximize this tax-free opportunity.
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TFSA 2026: Where the average 45-year-old stands
The average Canadian TFSA balance at age 45 is estimated to be slightly over $20,000. That’s the not-so-good news. This represents an $89,000 shortfall compared to this group’s cumulative TFSA 2026 contribution limit of $109,000.
The best advice I ever got when I started my first full-time job after graduating was to take advantage of any “free” money that the government or your employer is offering. This means setting money aside every paycheck to contribute to your RRSP. It also means maxing out on group RRSP contributions when your employer matches your contributions. Finally, it means setting up and prioritizing TFSA contributions, as the government is gifting us with tax-free investment income.
The truth is that the years pass quickly, and the earlier we set up the habit of regular TFSA contributions, the better. Financial advisors highlight mid-life as the time to really step up contributions — basically, it’s not too late if you’re behind. Even a little bit every paycheque makes a difference.
Taking full advantage of the opportunity
Taking full advantage of your TFSA means two things. The first is maxing out on your allowable TFSA contribution room, which I discussed in the previous section. The second is investing in the right kind of investments within your TFSA. This means stocks or bonds that generate the highest returns, as the higher the returns, the more tax savings to be had.
For example, you can invest in high-yield bonds. The interest on bonds is generally taxed as ordinary income. This means that it does not have preferential taxation treatment like dividends or capital gains has. So, it makes sense to reserve any high-yielding bond investment for your TFSA.
Likewise, another type of investment that would be a prime candidate for your TFSA would be high-yield dividend stocks, such as Telus (TSX: T). As you know, Telus is currently yielding 8.79% as the telecom giant has hit challenging times. Yet, Telus still has a lot going for it, and has formulated a plan to increase cash flows and returns. Getting this dividend income tax-free within your TFSA would be valuable, PLUS, you can pocket Telus stock’s future capital gains tax-free as well.
This brings me to my next point. Stocks that you think have the potential for massive capital gains over time are also ideal for your TFSA. BlackBerry (TSX: BB) is one of those stocks, in my view. It’s trading at a mere $5.16 today but the future looks promising. The connected car industry is ramping up and BlackBerry’s software is in the majority of these cars. Its latest quarter showed record results for this division, and strong increases in earnings and cash flow.
Ideally, you are holding your stocks for the long term, as this has been shown to be the best strategy when investing in stocks. Long-term returns of some of most successful stocks can be in the thousands of percent range. The tax savings on holding that in your TFSA would be massive.
The bottom line
We know that Canadians are understandably having a hard time maximizing their TFSA contributions at any age. It’s not easy, with the cost of living having risen so dramatically. Yet, at age 45 and in mid-life, many experts recommending really ramping up savings in order to best prepare for retirement years. Including both Telus and BlackBerry stock in your TFSA can help you get there.
