According to Canada Revenue Agency (CRA) statistics released in 2025 covering the 2023 contribution year, Canadians aged 55 to 59 held an average Tax-Free Savings Account (TFSA) fair market value of approximately $37,600.
That is a meaningful amount of money, especially when you consider that many Canadians in this age bracket are juggling multiple financial priorities at once. Some are helping children through post-secondary education. Others are paying down mortgages, caring for aging parents, or accelerating retirement savings as they move closer to the finish line.
It is also worth remembering that the TFSA is only one piece of the puzzle. Many Canadians in their late 50s also have Registered Retirement Savings Plans (RRSPs), workplace pension plans, non-registered investments, and home equity that do not appear in TFSA statistics. Looking at the TFSA balance alone rarely captures a household’s full financial picture.
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Why the TFSA becomes even more important later in life
Still, as retirement approaches, the TFSA often becomes one of the most valuable accounts a person owns. One reason is flexibility. While Canadians can begin collecting Canada Pension Plan (CPP) benefits as early as age 60, doing so results in a permanently reduced benefit. As a result, many retirees choose to defer CPP until age 65 or even age 70 to maximize future payments.
The TFSA can help bridge that gap. Instead of being forced to claim CPP early, retirees can draw tax-free income from their TFSA while allowing government benefits to continue growing. The same principle applies to other retirement income sources.
Old Age Security (OAS) generally begins at age 65, while Registered Retirement Income Fund (RRIF) withdrawals do not become mandatory until later. A TFSA provides a clean source of retirement cash flow that does not create taxable income and does not affect eligibility for government benefits.
That flexibility can be particularly useful for Canadians who want to retire early, transition into part-time work, or simply reduce their workload before fully retiring. In many cases, the TFSA acts as a bridge account, helping investors navigate the years between full-time employment and traditional retirement income sources.
One ETF that may fit the bill
For investors seeking a balanced TFSA holding, iShares Core Balanced ETF Portfolio (TSX:XBAL) is worth considering.
XBAL maintains a target allocation of approximately 60% equities and 40% fixed income, making it less aggressive than all-equity funds but still growth-oriented enough to help combat inflation over the long term.
The portfolio provides exposure to Canadian stocks, U.S. stocks, international developed markets, emerging markets, and a diversified mix of bonds through a collection of underlying iShares funds.
Everything is managed and rebalanced automatically. That means investors do not need to decide when to buy or sell individual asset classes or worry about maintaining target allocations themselves.
XBAL also remains reasonably affordable with a management expense ratio of approximately 0.19%. For investors approaching retirement who want a globally diversified portfolio with a moderate risk profile, XBAL offers a simple all-in-one solution.
