How Much Canadians Typically Have in a TFSA by Age 50

Here is the average TFSA balance if you are 50-years old. Use tax-free compounding to build substantive wealth for retirement.

Robin Brown

Author Bio Robin Brown has been a regular contributor to The Motley Fool Canada since January 2020. He began investing in 2009, during the depths of the global financial crisis, and has continued to refine his approach over the years. His investment philosophy emphasizes patience, quality, and identifying businesses with the potential to create lasting value. Robin currently lives in St. Albert, Alberta, where he manages a portfolio of Western Canadian industrial properties and private investments. Having lived in Canada, Norway, and Australia, he brings a broad perspective to his work and investing. Outside of work, Robin enjoys traveling, hiking, hunting, fishing, biking, and cooking for his wife, two daughters, and son. Education Bachelor's degree in Theology Advanced Diploma in Business Management Areas of Expertise Dividend investing, value investing, quality stocks, small-cap stocks, long-term investing, business fundamentals, balance sheet analysis, capital allocation, industrial real estate, and private investments. Social Media Profiles LinkedIn Favorite Investment Quote "Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down." — Warren Buffett

Published April 22, 4:10 pm EDT

It is never too late to start contributing and investing in your TFSA (Tax-Free Savings Account). Certainly, the sooner the better, but who doesn’t benefit from earning income completely tax-free?

The TFSA is flexible, so it can be used for long-term retirement savings, for a cottage downpayment, or to help your kids through college. The key is to simply use the account and maximize the tax-free benefit.

Right now, the average TFSA fair market value for someone between the ages of 50 and 54 is $30,190. It is good to see that many 50-year-old Canadians are using their TFSA, as that average is up nearly $10,000 from peers in their 40s.

However, the average 50-year-old can contribute a combined total of as much as $109,000. Many Canadians are unfortunately not using the TFSA as much as they could.

woman considering the future — Source: Getty Images

It’s never too late to invest in your TFSA

The good news it is never too late. Even a $30,190 TFSA compounded tax-free at a market rate of 9% could be worth as much as $109,000 by retirement (at age 65). However, if you maxed out your TFSA contribution today ($109,000) at the same investment rate, your TFSA could be worth as much as $397,000 by retirement!

If those investments were made outside of a TFSA, you could owe thousands of tax dollars when those investments are sold. Use the TFSA when investing, even if you can’t hit the average or the maximum.

Just take a bit of your salary per month and get it working tax-free for you. Smart investments and tax-free compounding can make a faster route to retirement. If you are looking for some smart investments for your TFSA, Pembina Pipeline (TSX: PPL) is a nice income option and Shopify (TSX: SHOP) is an interesting growth stock.

Pembina: A quality stock for income and growth

Pembina hits the mark from a return profile. In the past 10 years, its stock has compounded by a 4.5% compounded annual growth rate (CAGR). However, when you add in its 4.9% dividend, you get closer to a 9% average annual return.

Fortunately, future returns could be even better. This energy infrastructure stock should benefit from elevated energy prices due to the conflict in the Middle East. It could translate into better marketing pricing and more volumes through its network.

In the long-term, Pembina has growth from its LNG terminal coming into service (2028), data centre power opportunities (2030), and expansion of its collection and egress pipelines. It is targeting 5–7% annualized growth all the way to 2030. For income and modest growth, this is an attractive stock.

Shopify: A top Canadian growth stock for a TFSA

Shopify has been one of Canada’s best performing tech stocks. Even though its stock is down 19% this year, it is up 4,049% (45% CAGR) in the past 10 years.

Shopify is down due to fears about AI threats. While it is a concern to monitor, Shopify is already starting to use its own AI and agentic applications to help its merchants adapt to modern commerce. Its past two quarterly results have been exceptional. The company is starting to generate considerable free cash flow.

While it may not grow as fast as in the past, it still has a substantial runway ahead. You have to be comfortable with its elevated valuation. But if you believe in its growth story, this is a strong TFSA stock for the next 15 years.