Canada Pension Plan (CPP) users receive full pension benefits at 65 and begin collecting Old Age Security (OAS). However, 65 is not the mandatory retirement age in Canada. Seniors can work as long as they are capable, but others remain employed past 65 primarily for financial reasons.
The CPP and OAS are foundations in retirement, but not enough to replace employment income. That is why financial planning is essential to live comfortably in retirement. The federal government introduced the Tax-Free Savings Account (TFSA) to motivate Canadians to save and invest for retirement.
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TFSA reality and advantages at age 60
Are you 60 years old or turning 60 in 2026? This age is technically the start of the retirement years, as you can begin collecting your CPP, though at a reduced amount. Regarding utilization, the average TFSA balance of account holders aged 60 to 64 is $45,109. This Statistics Canada data for the 2023 tax year also shows an unused TFSA contribution room of $47,631, on average.
For comparison, the average TFSA balance for the age group 50 to 54 is $35,235 — 28% less than their older counterparts. The significant jump in 10 years could indicate higher earnings or easing financial obligations. Fortunately, there’s no maximum age limit for TFSA contributions.
Investment engine
It is highly possible that the unused room has accumulated to $50,000 today. A 60-year-old can turn this available space into an investment engine. The tax-free growth feature of the TFSA and the power of compounding will help produce a buffer fund in a late-stage catch-up before retirement.
For illustration purposes, an 8% dividend stock paying monthly dividends will compound a $50,000 investment to $74,492.29 in five years. The tax-free gain from the monthly reinvestment of dividends is 24,492.29, or 49% of the original investment. Note that you don’t take the cash; instead, you reinvest the dividends to buy more shares.
Real-world scenario
Atrium Mortgage Investment Corporation (TSX: AI) is an ideal option for a late-stage catch-up strategy. Moreover, its yield and monthly payout frequency fit the math in the example. At $11.72 per share, the dividend offer is 7.95%. The $563.8 million corporation is one of Canada’s largest alternative mortgage lenders.
As a mortgage investment corporation (MIC), Atrium is exempt from corporate income tax but must distribute 100% of its taxable income to shareholders as dividends. An added incentive to invest is the year-end dividend. Since going public in 2012, Atrium has been paying special dividends every year due to strong net income.
Atrium is 25 years old this year. Net income in the first quarter of 2026 increased 1% year over year to $12 million amid a challenging lending environment. Notably, the mortgage portfolio is well secured, with 95.3% being first mortgages. The ample and secure funding sources enable Atrium to grow its portfolio without any funding constraints.
According to Rob Goodall, CEO of Atrium, the MIC has maintained a conservative risk profile. Moreover, the investment objectives have not changed: preserve shareholders’ equity and provide shareholders with stable and secure dividends.
Financial cushion
TFSA users at 60 have sufficient time to build a massive financial cushion before retirement. Since there’s no maximum age limit to contribute, this investment engine can run beyond a five-year window to extend tax-free compounding.
