A 20-year-old Canadian thinking about retirement? Sounds weird, right? But starting investing early is the golden ticket to early retirement and compounding returns. At 20, you have a $14,000 Tax-Free Savings Contribution (TFSA) room.
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How much should a 20-year-old Canadian have in their TFSA to retire?
Many Gen Zs consider a TFSA as a normal savings account and hold cash in it. You are making a huge mistake by giving away tax-free money. As a 20-year-old, you might fall under the low-income tax bracket, so you need not worry about taxes. And if you invest in stocks and ETFs through a TFSA, you won’t have to worry about taxes in the future as well.
Starting at age 20, try to invest your complete TFSA contribution room in growth stocks. The TFSA began in 2009, and 36-year-old Canadians have a cumulative TFSA contribution room of $109,000. By the time you turn 36, you have a cumulative contribution room of $144,000, assuming the Canada Revenue Agency (CRA) increases the contribution limit by $500 every four years.
If you max out on your TFSA limit every year and your portfolio grows at a 20% compounded annual growth rate (CAGR), you might have a $1.2 million portfolio in 16 years, allowing you to retire in another four to five years.
TFSA stocks a 20-year-old Canadian should invest in for early retirement
Now is the time to invest in high-growth stocks where you can invest and forget for 20 years. Buying these stocks doesn’t require hundreds of dollars, but holding them for 20 years can make you a millionaire if their products change the future.
Ballard Power Systems
Ballard Power Systems (TSX:BLDP) is a stock to buy and hold for the long term as it brings the futuristic hydrogen fuel cell technology to heavy vehicles. It has orders and a manufacturing facility, but it has been struggling with high costs. However, the company completed restructuring and controlled costs, which helped it report a 17% gross margin in 2025 from a negative 13% in 2024. That’s a significant step towards turning profitable.
Ballard Power Systems’ 2025 earnings drove up its share price by 56% in the last 30 days. Despite such a sharp rally, the stock trades below $4 per share because the hydrogen fuel cell technology is still in the early stages. Once it becomes mainstream, Ballard stock could jump by leaps and bounds.
To give you a glimpse of the kind of returns the stock could give, its share price surged as much as 116% in September and mid-October 2025 as the company released its new fuel cell technology. Imagine the rally once the company becomes profitable.
These are tough times, and Ballard is navigating tariffs, exchange rates, precious-metal pricing, and inflation, and still improving profit margins and cost structures. A 20-year-old Canadian can invest $200–$300 in this stock and accumulate it at every dip. A $3 share price is a good entry point.
Technology ETF
The iShares S&P/TSX Capped Information Tech Idx ETF (TSX:XIT) is a good way to invest in the technology sector and benefit from multiple trends of artificial intelligence (AI), e-commerce, software, and others that are shaping the future. The ETF’s top three holdings are Constellation Software, Shopify, and Celestica. Buying one share of all three stocks could cost you $3,350, but one unit of the XIT ETF could cost you only $74 a unit. For an annual management fee of 0.55%, you can get exposure to the price volatility of these stocks.
The ETF has delivered an average annual return of 17% in 10 years, which is sufficient to grow your money 10 times in 15 years. It means a $1,000 investment in the XIT ETF can become $10,000 in 15 years, if it maintains the average annual returns. You could exercise the financial discipline to invest $100 every month in this ETF and build a sizeable portfolio in 10 years.
