After the $7,000 in contribution room added in the 2026 update, the cumulative contribution room in the Tax-Free Savings Account (TFSA) for those eligible to open one since its inception stands at $109,000. According to TFSA data, Canadians below the age of 50 have been using up to 27% of their contribution room. Those at the age of 50 were found to be using around 34%.
While there is a sharp increase in the cumulative contribution room usage for Canadians after turning 50, there is plenty more space available.
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What the average 50-year-old’s TFSA balance is like
According to TFSA data, the age group of Canadians between 45 and 49 years had an average of $9,737 in contributions made to their TFSAs. For Canadians between 50 and 54, the number sharply increases to $11,051. Even though average withdrawals from TFSAs are close to contributions, the older Canadians saw the fair market value (FMV) of their TFSAs rise due to the returns from investments in the account.
The total FMV of Canadians in the 45-49 group was $32.6 billion. For Canadians between 50 and 54, the total FMV jumped significantly to $40.4 billion. According to data from 2023, a 50-year-old in Canada had around $30,190 in their TFSA, accounting for around 34% of the available contribution room. Considering they maintained a similar ratio, they would have a $37,000 TFSA balance.
If you’re 50 or nearing it, you know these numbers just cannot cut it. The time to retire is coming closer, and this is when you start saving and investing more aggressively to prepare for a comfortable retirement. Now, the only thing left to wonder about is how much you should be investing in a TFSA to set yourself up well for your golden years.
How much should you invest in a TFSA?
The TFSA is called a savings account, but it is more of an investment vehicle and one of the best things the Canadian government could’ve done for Canadians. The ability to contribute with after-tax dollars means you also enjoy the returns without incurring taxes.
To make things better, you can always withdraw from the account with zero penalties for early withdrawals. The Canada Revenue Agency (CRA) even lets you contribute what you withdrew by adding the withdrawals to your contribution room with the next update.
The CRA has only one real limitations are the fact that you cannot over-contribute and that you can use the account to hold qualifying assets. To answer how much you should invest in a TFSA, the only correct answer is that you max out your available contribution room. If you’re looking to inject some growth into your portfolio to get closer to your financial goals, consider a high-growth stock like Shopify (TSX: SHOP).
Shopify is the kind of stock that can deliver the out-sized returns many investors look for when they are on the hunt for high growth. The $206.88 billion market-cap TSX tech stock is a giant in the e-commerce space, providing a platform that lets merchants of all sizes around the world establish an online presence.
As of this writing, Shopify stock trades for $158.64 per share, down by a drastic 37.3% from its 52-week high amid the bear market. Where some Canadians might find that an alarming downturn, seasoned investors have been waiting to pounce. The underlying business has solid fundamentals. The rise of agentic artificial intelligence and Shopify’s increasing investments in the space position it for solid long-term growth once the dust settles.
Foolish takeaway
The stock market is entirely unpredictable due to the war that the U.S. and Israel started with Iran earlier this year. Investors might see more short-term pain with investments before the market conditions improve. I would advise keeping a close eye on Shopify stock and shoring up your position in the stock, especially if share prices decline further. The potential upside when the dust settles could be remarkable.
