Most Canadians in their mid-50s aren’t saving nearly enough for retirement in their Tax-Free Savings Accounts (TFSAs). According to a detailed report from Blueprint Financial, the average TFSA balance for Canadians aged 55 to 59 is $33,200. That’s well below what financial experts recommend for people approaching the final stretch before retirement.
For context, those aged 50 to 54 hold an average of $26,400, while those aged 60 to 64 hold an average of $40,000.
The modest balances stem from two main problems. First, people contribute inconsistently. Second, they park their money in low-interest savings products rather than investing in inflation-beating asset classes.
Several Canadians treat the TFSA as a “savings account” rather than an “investment account,” resulting in subpar returns.
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Why your TFSA matters more at 55
At 55, a well-funded TFSA becomes increasingly valuable. Unlike RRSP (Registered Retirement Savings Plan) withdrawals, TFSA distributions don’t trigger taxes or affect government benefit eligibility for Canada Pension Plan, Old Age Security, or Guaranteed Income Supplement.
This flexibility makes the TFSA one of the most powerful retirement planning tools available. You can withdraw money when you need it without worrying about tax implications or losing government benefits. That’s a massive advantage over traditional retirement accounts.
Building real wealth with growth stocks
Canadians should consider owning quality growth stocks inside the TFSA to build long-term wealth.
Exchange Income Corporation (TSX:EIF) offers a perfect example of how growth stocks can transform your retirement savings. The company operates essential services across aviation and manufacturing, positioning it at the intersection of several powerful trends.
In the last 15 years, EIF stock has returned more than 1,200% to shareholders after adjusting for dividend reinvestments.
In the third quarter (Q3) of 2025, it reported revenue of $960 million with an adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $231 million.
The company’s earnings per share rose to $1.32, up from $1.18 in the prior year. That represents 17% growth even after issuing new shares for acquisitions and debt conversions.
Exchange Income sits at the forefront of several megatrends.
- Increases in defense spending create opportunities for surveillance services.
- Critical mineral development drives demand for fly-in, fly-out operations.
- Artificial intelligence and data centres require transmission infrastructure, benefiting the company’s composite matting and electrical operations.
The company provided 2026 guidance of $825 million to $875 million in adjusted EBITDA. That’s based purely on existing operations without factoring in new acquisitions, significant contracts, or major growth investments.
Management increased the annual dividend from $2.64 to $2.76 per share, a 5% increase. The company eliminated all convertible debentures from its capital structure. Its aggregate leverage ratio is at a historic low, near 2.89 times, well within target ranges.
With approximately $1.2 billion in available capital, Exchange Income can execute on growth opportunities without needing to access equity markets.
Why growth stocks belong in your TFSA
Holding growth stocks like Exchange Income inside a TFSA means all dividends and capital gains grow completely tax-free. When you eventually withdraw the money in retirement, you pay zero taxes on decades of growth.
Compare that to holding cash or Guaranteed Investment Certificates earning 3% annually. A $33,200 TFSA balance earning 3% generates about $996 per year. After 10 years with no additional contributions, you’d have roughly $44,600.
Now consider that same $33,200 invested in quality growth stocks averaging 10% annual returns (very achievable with companies like Exchange Income). After 10 years, that grows to approximately $86,200. That’s nearly double the cash scenario.
The difference becomes even more dramatic over 15 or 20 years. Compound growth works powerfully in your favor when you own businesses generating real earnings growth rather than sitting in cash.
The key is selecting companies with sustainable business models, strong management teams, and exposure to long-term trends. Exchange Income checks all these boxes through its essential services, government contracts, and its position in Northern development.
