The Tax-Free Savings Account (TFSA) is a benefit the Canada Revenue Agency (CRA) has provided to Canadians above 19 years of age. The benefit is that you invest your after-tax income in the account, and whatever you earn from there is no concern of the CRA, provided you stay true to the four rules:
- No trading, only investing.
- No alternative investments like stocks of a private company or a real estate trust.
- No over contribution.
- Not contributing to a TFSA if you are not a Canadian resident for tax purposes.
Many Canadians are taking advantage of theTFSA, with the average TFSA balance for a 50-year-old reaching $30,190 in the 2023 tax year, according to the CRA statistics. If your TFSA balance is above the average balance, you know you are doing better than many. But is it enough?
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Is having an average TFSA balance enough?
The average balance includes the net contribution after withdrawals and the investment returns in your TFSA. In the 2023 tax year, the cumulative TFSA contribution alone was $88,000. Even if we assume that account holders did not invest and just kept their money idle, they are using only one-third of the TFSA benefit.
The underused opportunity cost is far greater than the unused contribution room of $57,855. If you had maxed out on your TFSA contribution and invested it in stocks that generate a 5% average annual return, your TFSA balance would be closer to $160,000 at the start of 2026. That’s an opportunity cost of $130,000.
| Year | TFSA Contribution | Cumulative TFSA Balance | 5% average return |
| 2009 | $5,000 | $5,000.00 | $250.00 |
| 2010 | $5,000 | $10,250.00 | $512.50 |
| 2011 | $5,000 | $15,762.50 | $788.13 |
| 2012 | $5,000 | $21,550.63 | $1,077.53 |
| 2013 | $5,500 | $28,128.16 | $1,406.41 |
| 2014 | $5,500 | $35,034.56 | $1,751.73 |
| 2015 | $10,000 | $46,786.29 | $2,339.31 |
| 2016 | $5,500 | $54,625.61 | $2,731.28 |
| 2017 | $5,500 | $62,856.89 | $3,142.84 |
| 2018 | $5,500 | $71,499.73 | $3,574.99 |
| 2019 | $6,000 | $81,074.72 | $4,053.74 |
| 2020 | $6,000 | $91,128.45 | $4,556.42 |
| 2021 | $6,000 | $101,684.88 | $5,084.24 |
| 2022 | $6,000 | $112,769.12 | $5,638.46 |
| 2023 | $6,500 | $124,907.58 | $6,245.38 |
| 2024 | $7,000 | $138,152.96 | $6,907.65 |
| 2025 | $7,000 | $152,060.60 | $7,603.03 |
| 2026 | $159,663.63 |
Suppose you invested $5,000 in 2009 and earned a 5% return of $250. In 2010, you will invest another $5,000, bringing your TFSA balance to $10,250. You will earn 5% on this new balance, which comes to $512. Long-term investing makes your money work and compounds your returns.
After learning about the potential of compounding, do you think that having an average TFSA balance is enough?
How to boost your TFSA balance at age 50
It is still not too late to boost your TFSA balance. At age 50, you are at the peak of your career, have ample unused TFSA contribution room, and money to invest. Why not sacrifice one or two years of your vacation and invest that money in a TFSA to make money work for you? The stock market is at the cusp of new growth opportunities in artificial intelligence (AI), the global trade shift, and Canadian infrastructure projects.
AI stock to buy
Micron Technology (NASDAQ:MU) is a US-based memory chipmaker. The rapid AI infrastructure investment has created an acute supply shortage of memory chips, giving Micron pricing power. In December 2025, Micron said that it will stop producing memory chips for mobile and PCs to divert capacity to data centre chips. The next two years could see more growth after the stock jumped 330% in 2025.
Even if the current AI data centre bubble bursts, demand for memory chips from mobile phones, computers, automotives, and other devices will drive growth. AI demand will keep returning as it will need more memory to access and process data with growing AI applications.
In the last 10 years, Micron stock has jumped 3,900%, riding the cloud, mobile, crypto, and now AI rally. Every next cycle has surpassed the peak of the previous cycle, making it a stock to own for both medium and long term.
Other stocks to consider
You can use the unused TFSA contribution room of more than $50,000 to also buy Descartes Systems for recovery in trade volumes and TC Energy for North American natural gas liquids (NGL) exports opportunity.
