According to the latest Statistics Canada data released in 2025 for the 2023 contribution year, the average Canadian Tax-Free Savings Account (TFSA) balance for those aged 60 to 64 was $45,109. However, an even more revealing number was the average unused TFSA contribution room for that same age group: $47,631.
That statistic highlights an important reality about retirement planning in Canada. Many Canadians are still leaving significant tax-free investing opportunities on the table. If you’re consistently maximizing your TFSA contributions, you’re already ahead of a large portion of investors.
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Why TFSA contribution habits matter
One of the biggest lessons from the data is that falling behind on TFSA contributions can be difficult to reverse later in life. The earlier you build the habit of contributing regularly, the easier it becomes to grow substantial wealth through compounding.
For 2026, the annual TFSA contribution limit is $7,000. To fully maximize that room, investors would need to contribute roughly $583 per month throughout the year. However, if someone waits until June to start contributing, they would need to invest $1,000 per month for the remainder of the year to catch up.
That’s why the “pay yourself first” strategy is so effective. Automatically transferring money into your TFSA every payday can help remove the temptation to spend and turn investing into a consistent habit.
The power of tax-free growth
The TFSA remains one of the most powerful investment tools available to Canadians because all investment income earned inside the account is completely tax free. Interest, dividends, and capital gains can compound for decades without the hindrance of taxes.
Even conservative investors can benefit meaningfully. For example, holding guaranteed investment certificates (GICs) earning 3% annually would generate about $1,353 in tax-free income on a balance of $45,109. On a fully utilized TFSA balance of $92,740, that income would rise to approximately $2,782 annually without any tax bill attached.
For retirees, that extra tax-free income can help offset rising living costs while preserving government benefits that may otherwise be reduced by taxable investment income.
A solid stock example for long-term investors
Canadians with long investment horizons of at least five years may want to focus on high-quality dividend stocks inside their TFSAs to target stronger long-term returns. One good example is Enbridge (TSX:ENB). The energy infrastructure giant currently offers a dividend yield near 4.8% and has increased its dividend for about 30 years.
Enbridge benefits from highly predictable cash flows generated by its pipeline and utility assets. Because much of its business operates under long-term contracts, the company can continue generating stable earnings even during periods of economic uncertainty and energy price volatility. That reliability makes it a more defensive investment for retirees and income-focused investors.
Suppose an investor held $50,000 worth of Enbridge shares inside a TFSA at a 4.8% yield. That investment alone would generate $2,400 per year in tax-free dividend income, while also offering the potential for future capital appreciation over time.
Other popular Canadian blue-chip choices for TFSA investors include Fortis and Royal Bank of Canada, both of which have long histories of dividend growth and resilient businesses. Interested Canadians should aim to add to their positions on market corrections.
Investor takeaway
Ultimately, the average TFSA balance at age 60 tells us that many Canadians are still underutilizing one of the best wealth-building accounts available. Investors who contribute consistently, stay invested for the long term, and focus on quality assets can put themselves in a much stronger financial position for retirement.
