Canadians approaching retirement may be surprised by how modest the average Tax-Free Savings Account (TFSA) balance is at age 50. According to Statistics Canada data released in 2025 for the 2023 contribution year, Canadians aged 50 to 54 held an average TFSA balance of just $30,190. Perhaps what’s surprising is that the same group had an average unused contribution room of $57,855.
The numbers suggest many Canadians are not taking full advantage of one of the country’s best wealth-building tools. With retirement drawing closer, maximizing TFSA contributions could make a meaningful difference in long-term financial security and passive-income generation.
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Why unused TFSA room matters
A TFSA offers Canadians tax-free growth and tax-free withdrawals, making it an ideal account for both conservative savers and long-term investors. Yet many investors continue to leave tens of thousands of dollars unused.
Even cautious investors could benefit by simply parking idle cash in guaranteed investment certificates (GICs). At an interest rate of 3%, the average unused TFSA room of $57,855 could generate roughly $1,736 annually in tax-free income. Over time, that additional income compounds without creating any tax burden.
However, Canadians with longer investment horizons may achieve far stronger results by selectively buying quality dividend stocks capable of delivering both income growth and capital appreciation.
Why Manulife may be a good buy today
One TFSA idea is Manulife (TSX: MFC), which recently experienced a meaningful pullback of 5.7% yesterday after releasing its first-quarter results. Despite the market reaction, the company’s underlying performance remained solid and reinforced its long-term growth potential.
In the quarter, Manulife reported core earnings growth of 8% to $1.8 billion on a constant currency basis, while core earnings per share (EPS) climbed 11% to $1.06. Its core return on equity (ROE) reached an impressive 16.5%, and adjusted book value per share increased 6% to $39.01.
Although core earnings dipped 6% to $352 million and 4% to US$241 million year over year for its Canadian and U.S. operations, Manulife’s Asian operations more than boosted results, as the segment continued to be its biggest growth engine. Core earnings in Asia surged 22% year over year to US$598 million, highlighting the strength of Manulife’s international expansion strategy. Meanwhile, its global wealth and asset management business also posted modest growth with core earnings rising 2% to $448 million.
Management remains focused on digital transformation, artificial intelligence (AI) integration, and expanding into higher-growth markets. The insurer is targeting a core return on equity of 18% or higher by 2027, suggesting confidence in continued earnings momentum.
A solid TFSA stock for long-term investors
At $51.50 per share at writing, Manulife stock offers a dividend yield of nearly 3.8%, providing investors with attractive passive income today while still leaving room for future growth. The dividend appears secure, supported by consistent earnings growth, a sustainable payout ratio, and a healthy balance sheet.
Importantly, Manulife has increased its dividend for more than a decade, with a 10-year dividend-growth rate close to 10%. That combination of rising income and reasonable valuation makes the stock a potential candidate for TFSA investors seeking dependable long-term compounding.
Trading at about 11.9 times earnings, the stock appears reasonably priced relative to its expected earnings growth of 8% or more annually over the next few years.
Investor takeaway
The average TFSA balance for Canadians in their early 50s remains surprisingly low, considering the large amount of unused contribution room available. Investors who put that unused space to work — whether through conservative GICs or quality dividend stocks like Manulife — could significantly boost their retirement income and long-term wealth.
