The Average TFSA Balance for Canadians at 55

Here’s the average TFSA balance of Canadians at 55 and how you can use the account to make your retirement far more comfortable.

Key Points
  • Many Canadians near retirement underuse their TFSA (average balance ~$43,519 for ages 55–59 vs ~$95,000 cumulative room), so using TFSA space for income-producing investments can help close the savings gap.
  • SmartCentres REIT (TSX:SRU.UN) pays $0.15417 per unit monthly (≈6% yield), has a 21‑year monthly distribution track record, a 35.6M sq ft mixed‑use portfolio anchored by Walmart, and strong occupancy and rent collection.
  • Foolish takeaway: SmartCentres can be a practical TFSA holding to generate reliable monthly income and boost retirement savings over the next decade, though diversification remains important.

The average age of retirement in Canada is 65. This is when pensions like the Canada Pension Plan (CPP) and Old Age Security (OAS) benefits begin. However, these benefits have been designed to help Canadians cover only a portion of their expenses during the golden years. The rest is something to cover using your savings and investments to fully realize the kind of lifestyle you want in retirement.

This is where retirement accounts like the Tax-Free Savings Account (TFSA) can come in handy to cover the gap. Despite all the advantages that come with the tax-sheltered status of the account, most Canadians seem to be underutilizing their TFSAs. However, those nearing retirement have been making better use of the contribution room.

Canadians turning 55 have around a decade to boost their savings. According to Statistics Canada for the 2024 tax year, Canadians in the 55-59 age band contributed an average of around $13,100 to their TFSAs. For the same year, Canadians aged 50-54 contributed an average of around $11,900.

The average TFSA balance for Canadians between 55 and 59 was $43,519, which is less than half of the $95,000 of cumulative contribution room available to them in 2024.

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Can you make up for the lost time?

The best time to start planning for your retirement is as early as possible. A solid retirement plan requires a long-term approach to get where you need to be comfortable when you stop working. The longer you give your money time to compound and grow in a TFSA, the better returns you can get.

By 55, you don’t have the luxury of a few decades to watch your investments grow. However, making more aggressive investment decisions can help you get the boost you need. I would advise considering monthly dividend-paying stocks that boast higher-than-usual dividend yields, backed by a solid underlying business that can sustain those payouts.

High-yielding monthly dividends

One of my favourite picks to consider for reliable monthly dividends is SmartCentres REIT (TSX: SRU.UN). While it trades on the TSX, it isn’t a stock. It is a real estate investment trust (REIT), which is a trust that lets you buy individual units or shares. The trust invests in a portfolio of properties that it rents and leases to generate rental income. In turn, REIT investors get monthly returns based on the number of units they hold.

SmartCentres REIT is a $5.09 billion market-cap, fully integrated REIT, boasting a best-in-class and growing portfolio of mixed-use properties spread across communities nationwide. It has over 35.6 million square feet of leasable space, with high occupancy and excellent rent collection.

The REIT has a strong tenant base across its properties, with big names like Walmart anchoring most of its revenue. More recently, SmartCentres and Walmart have entered an agreement to build more shopping centres and city centres around Walmart stores.

Foolish takeaway

SmartCentres REIT has a reliable track record of paying investors their monthly dividends regularly. In over 21 years of paying monthly distributions, SmartCentres has paid through the 2008 economic crisis and through the COVID-19 pandemic without fail. Paying $0.15417 per month for each share, SmartCentres REIT boasts an annualized 6% dividend yield that can be ideal to boost your TFSA till retirement. It can be a good investment to hold for the next 10 years and beyond.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends SmartCentres Real Estate Investment Trust and Walmart. The Motley Fool has a disclosure policy.

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