The earlier you start investing, the faster you can grow rich and retire early. Yet many Canadians in their 20s do not use the Tax-Free Savings Account (TFSA) to its optimum. Statistics Canada’s TFSA contribution numbers for the 2023 tax year teach us something about Canadians’ investment behaviour.
Canadians have used only 20–30% of their TFSA contribution room through their peak working age of 30–50. We considered the Fair Market Value (FMV) to arrive at this figure. The contribution could have been lower as the investment returns are included in the FMV.
Source: Getty Images
What the average Canadian TFSA balance at 60 can teach us
However, the TFSA contributions increased significantly from age 50. People in the 55–59 age group invested 25% more than those in the 50–54 age group. Those in the 60–65 age group invested 20% more than those in the 55–59 age group.
| Age Group (2023 tax Year) | 30–34 | 35–39 | 40–44 | 45–49 | 50–54 | 55–59 | 60—65 |
| Average Contribution | $8,173 | $8,657 | $9,014 | $9,737 | $11,051 | $12,302 | $13,167 |
| Avg Fair Market Value (FMV) | $16,760 | $18,842 | $20,670 | $24,150 | $30,190 | $37,600 | $45,109 |
| Cumulative Contribution (CC) | $73,000 | $88,000 | $88,000 | $88,000 | $88,000 | $88,000 | $88,000 |
| FMV/ CC | 23% | 21% | 23% | 27% | 34% | 43% | 51% |
You can see that Canadians are playing catch-up to their TFSA savings after 50. No matter how much you invest in later years, it cannot compensate for the 20 years lost by staying away from the market.
Instead of investing $13,167 in the TFSA at age 60, had you invested that amount at age 45 in the iShares S&P/TSX Capped Information Tech Idx ETF (TSX: XIT), your TFSA FMV would be very different. Going 15 years back from 2023 means April 2008, before the financial crisis hit in September 2008.
In April 2008, the XIT ETF was trading near $8.36. A $13,167 investment would have bought you 1,575 units of the ETF, which are now worth $111,840. This TFSA FMV is more than double the $45,109 average TFSA balance 60-year-old Canadians have.
| Share Count | Invested Amount | Stock | April-08 | April-26 | Portfolio Value |
| 1,575 | $13,167 | XIT ETF | $8.36 | $71.01 | $111,840.75 |
| 626 | $13,167 | CNQ | $21.02 | $60.80 | $38,085.33 |
Even if you did not invest in the technology ETF but a dividend stock like Canadian Natural Resources (TSX: CNQ), your TFSA FMV would be $38,085.33. Adding up 15 years of cumulative dividends, you would have received $10,810 in passive income alone. In 2026, your 626 CNQ shares would fetch you $1,565 in annual passive income. Such returns would be possible had retirees of today started retirement planning at age 45.
Why invest in a technology ETF through a TFSA?
The XIT ETF is an attractive buy even today as it gives you exposure to Canada’s top-performing technology stocks. This ETF has dipped 19% from its October 2025 peak. It has the potential to grow your money by 15–20% annually for the next 15 years. A 15% compounded annual growth rate (CAGR) could convert $10,000 to $71,370, and a 20% CAGR to $144,070.
Technology keeps evolving. Different companies have different inflection points. The XIT ETF invests in all fundamentally strong companies, giving you comprehensive exposure to the technology supply chain. Here are two instances to give you a fair understanding of how the ETF manages to give an 18% CAGR.
The pandemic upside and limited downside
Shopify and Lightspeed Commerce were among the best-performing stocks during the pandemic. They drove XIT ETF’s value up 142% by October 2021. The ETF keeps rebalancing the holdings to replicate the index weightage. The index caps the relative weight of any single constituent at 25%. This prevents the downside risk as frequent profit booking and reinvesting take place. Thus, the ETF dropped 48% in the 2022 tech meltdown when Shopify and Lightspeed lost 83–88% of their value.
The artificial intelligence boom
The XIT ETF is now riding the AI boom, with Celestica taking the lead as the top holding in the ETF. While Celestica’s stock has rallied more than 1,500% since October 2023, the XIT ETF rallied 75% as it has recently increased its holding in the stock.
The ETF gives you exposure to all technology cycles, and rebalancing helps mitigate risk, making it a buy even at its high price.
