Retirement is a looming reality the moment you turn 50. Most in this age are in their peak earning years and well-positioned to take financial planning for their sunset years seriously. The average Tax-Free Savings Account (TFSA) balance of Canadians at age 50 somehow offers an insight into how preparations are coming along.
Published data show underutilization of the TFSA. If you are a TFSA user, how does your balance compare against everyone else? Fortunately, there’s a good 10 to 15 years ahead to build a substantial nest egg through the one-of-a-kind investment vehicle.
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Baseline numbers
According to the Canada Revenue Agency (CRA), the average TFSA balance in Canada as of 2024 is $38,566. The figure in the 50 to 59 age bracket is in the range of $35,5000 to $49,000. Notably, the average amount increases with each decade, with the 80-plus group at $76,305.
However, if you are eligible since the TFSA’s inception in 2009 but have yet to open an account, the cumulative lifetime contribution limit is $109,000. Compared with national averages, a typical Canadian has not reached or matched the ceiling.
Low utilization rate
This gap is clearer when looking at how few people max out their accounts. According to the CRA, there are 19,322,830 TFSA holders as of the 2024 contribution. Surprisingly, only 1,711,020 users, or 8.9%, have maximized contributions. Perhaps many still treat the TFSA as an ordinary savings account. The term ‘savings’ is misleading, as the account is not a cash vault.
Harness the true power.
If you are 50 and fall short of the average TFSA balance, keep your feet on the ground and do not panic. The fact that the amount increases in the higher age groups means that people are turning the tide. For example, the average TFSA balances for Canadians aged 60–64 jumps 21.8% to $52,381.
The TFSA offers tax-free compounding growth and tax-free withdrawals. Folks at 50 can take advantage of this unique feature using their available contribution rooms. Instead of holding cash, invest in productive, income-generating assets such as bonds, guaranteed investment certificates (GICs), mutual funds, exchange-traded funds (ETFs), and stocks. Stocks are generally the top investment option of TFSA investors.
Anchor with a dividend grower
TC Energy (TSX:TRP) is a suitable anchor in a TFSA portfolio. The $100.4 billion Midstream & Gas infrastructure company has raised its annual dividend payout for 26 consecutive years. This energy major is a screaming buy at less than $100 per share.
TRP trades at $96.33 per share and pays a 3.6% dividend. It pulled back 1% in the last five days, but remains positive up 28% year-to-date. A $25,000 contribution room (the investment) will balloon to $43,051.90 in 15 years, including reinvestment of quarterly dividends.
François Poirier, President and CEO of TC Energy, said, “We entered 2026 with strong momentum. Our best safety performance in six years drove seven delivery records across North America.” Its Columbia Gas System will serve as the new platform for capital-efficient opportunities in a high-growth power and industrial corridor.
Window of opportunity
For a 50-year-old Canadian with a TFSA balance below the ceiling, the unused contribution room is a massive window of opportunity. Investing in an established dividend payer and grower will help build a tax-free retirement fund within 15 years or more.
