The Average TFSA Balance for Canadians at 55

Discover how the TFSA can maximize your retirement savings and learn the contribution trends for Canadians aged 55 to 59.

Puja Tayal

Author Bio

Puja Tayal grew up in a small-business family where dinner conversations often centred on working capital and savings. Her early experiences with investing, particularly during the 2008 financial crisis, shaped her approach to understanding markets and evaluating investment opportunities. She began her career at a mutual fund company before moving into investor education and financial writing for asset and wealth management firms. Before joining The Motley Fool, Puja wrote for Market Realist, where she extensively covered the semiconductor industry. Her published work has also appeared in The Indian Express. Puja believes every stock has a story that can help investors understand its potential returns. She combines business analysis with different investing approaches to help investors make informed decisions and align their portfolios with their long-term financial goals. Outside of finance, Puja enjoys long drives, catching up with friends, watching superhero and science-fiction movies, and managing her family portfolio. She also has a keen interest in artificial intelligence and its potential to reshape the world.

Education

Bachelor's degree in Accounting and Finance, University of Mumbai (2007)
CFA Level I

Areas of Expertise

Qualitative company analysis, management strategy, risk assessment, long-term investing, portfolio diversification and rebalancing, dividend reinvestment, cyclical growth opportunities, compounding strategies, growth stocks, and dividend stocks.

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Favorite Investment Quote

"Risk comes from not knowing what you're doing." — Warren Buffett

Published May 21, 8:15 pm EDT

The average retirement age in Canada is 65 years. That is when your Old Age Security (OAS) and Canada Pension Plan (CPP) begin. You also realize that these payments are not enough. Thus, most Canadians start boosting their savings at age 55 as their retirement date nears. Statistics Canada data for the 2024 tax year show that Canadians in the 55–59 age group contributed an average of $13,157 to their Tax-Free Savings Account (TFSA). This is more than the $11,942 contributed by those in the 50–54 age group.

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Average TFSA balance for Canadians at 55

The average TFSA balance for Canadians in the 55–59 age group was $43,519, which is 46% of their cumulative contribution room of $95,000 in 2024. You can see a remarkable change in the average balance from those in the 50–54 age group.

TFSA Statistics (2024 tax Year)	50–54	55–59
Average Contribution	$11,942	$13,157
Avg Fair Market Value (FMV)	$35,235	$43,519
Cumulative Contribution (CC)	$95,000	$95,000
FMV/ CC	37%	46%

Can accelerating TFSA investments make up for lost time?

The golden rule of investing is to start early and stay invested. The longer you give your money time to grow, the better the returns will be. Since you no longer have the luxury of time, it’s time to make some aggressive investments. With only 10 years left to retire, you can put your retirement savings on steroids. Consider investing in high-yield dividend stocks and high-growth stocks that can help catch up on some lost time.

High-yield dividend stock to boost passive income

SmartCentres REIT (TSX: SRU.UN) is a good dividend stock to buy through a TFSA. It has a high annual dividend yield of 6.6% that it distributes in 12 equal installments. SmartCentres is a smart choice as its main tenant is Walmart. The REIT signed up the grocer way back in 1999. At that time, SmartCentres was First Pro, and it signed a massive master lease agreement to develop and anchor shopping centres across Canada exclusively around Walmart stores.

After 27 years, Walmart accounts for 23% of SmartCenters’ revenue. The REIT has also scaled its agreement. Now it is not only building anchor shopping centres but city centres around Walmart stores. City centres are located at the intersection and have commercial and residential properties. Since its major tenant is a grocer, SmartCentres has also made storage facilities and leased them. Its business model is to use every inch of space.

Its 21-plus years of distribution payment history show that the REIT can withstand big blows from events such as the 2008 Financial Crisis to the 2020 pandemic. You are sure to receive the monthly payouts from SmartCentres. These monthly payments can be reinvested in high-growth stocks to build a sizeable retirement portfolio.

High-growth stocks to boost a retirement portfolio

The dividends from SmartCenters can be invested in other dividend stocks like Power Corporation of Canada or growth stocks like Broadcom (NASDAQ: AVGO). The TFSA allows you to invest in US stocks and grow your investment tax-free. However, US dividends will face withholding tax, which makes US growth stocks attractive in a TFSA.

Broadcom is a one-stop shop for all communication chip needs. The company has been making acquisitions to build capabilities. Today, Broadcom offers a complete range of communication chips and an artificial intelligence (AI) infrastructure environment.

Why is a TFSA ideal for aggressive investing?

The TFSA is a perfect instrument for such an aggressive investing strategy, as it allows your investments to grow tax-free. You pay no capital gains tax, Canadian dividend tax, or tax on withdrawals. Unlike a Registered Retirement Savings Plan (RRSP) that has an expiry at age 71, a TFSA has no expiry. You can continue investing and withdrawing from a TFSA till your last breath.

Moreover, RRSP contribution room is based on income, whereas TFSA contribution room is based on age. John and Patrick, both aged 55, one earning $70,000 and the other earning $200,000, will have the same cumulative TFSA contribution room. Who makes the most of the TFSA depends on how much they contribute and where they invest.