The Average Canadian TFSA Balance at 60 Reveals Something Important

The average Canadian Tax-Free Savings Account (TFSA) at 60 isn’t six figures.

CRA data shows Canadians aged 60 to 64 had an average TFSA fair market value of $52,381 in the 2024 tax year. That number may surprise people. By 60, many Canadians have used the TFSA for more than a decade. Some have even had access to the account since it launched in 2009.

But the number also reveals something important: the TFSA isn’t just about how much you contribute. It’s about what you own inside it.

A far way off

Plenty of Canadians still treat the TFSA like a savings account. That’s understandable. The name itself says “savings account,” and many people use it for emergencies, vacations, home repairs, or a safe place to keep cash. There’s nothing wrong with that. A TFSA can do all those jobs.

But for Canadians near retirement, the TFSA can do something bigger. It can become a tax-free growth account that supports retirement income, future withdrawals, or estate planning. And the tax benefits are enormous.

During retirement, Canadians are eventually forced to started taking out their retirement savings when the Registered Retirement Savings Plan (RRSP) changes over to a Registered Retirement Income Fund (RRIF). Those funds may not be needed yet, allowing the TFSA to start doing the heavy lifting.

That’s where the BMO S&P 500 Index ETF (TSX: ZSP) can help.

ZSP

ZSP is a simple ETF that tracks the S&P 500. That gives Canadian investors exposure to 500 of the largest U.S. public companies through one TSX-listed fund. The fund includes American giants from tech to banks. In other words, it gives TFSA investors access to many of the companies driving global earnings growth.

For a 60-year-old investor, that may sound too aggressive at first. Retirement could be close. Market swings feel more serious when there are fewer working years ahead. But investing does not end in retirement. Many Canadians will need their portfolios to last 20, 25, or even 30 years after leaving full-time work.

That changes the TFSA conversation.

Think long term

Money needed in the next year or two probably shouldn’t sit in an all-equity ETF. But money meant for later retirement years can still benefit from growth. A TFSA is especially useful for that because gains, dividends, and withdrawals aren’t taxed. If ZSP grows over time, that growth can stay sheltered.

The cost is also low. ZSP’s management expense ratio is 0.09%, which means fees take only a small bite from returns. That’s useful for long-term investors, because high fees can quietly eat away at compounding.

There’s also a behavioural benefit. Instead of trying to choose the perfect U.S. stock, investors can own the broad U.S. market. If technology leads, ZSP participates. If financials, healthcare, industrials, or consumer companies take over, the ETF adjusts with the index. That simplicity can help investors stay invested.

The risk is volatility. ZSP can fall when U.S. markets drop. It won’t protect investors from recessions, valuation resets, currency moves, or market corrections. The S&P 500 also leans heavily toward large U.S. technology companies, so investors should avoid making it their only holding if they want a balanced retirement portfolio.

Bottom line

Still, the average TFSA balance at 60 shows why growth deserves attention. A $52,381 TFSA is useful. But if too much of it sits in cash for years, inflation can weaken its power. A carefully chosen ETF can give that money a better chance to grow.

The smartest approach may be balance. Keep emergency money safe. Hold income investments where they fit. But use part of the TFSA for long-term growth through an ETF such as ZSP. In fact, here’s what that $52,381 could bring in for reinvestment.

The average Canadian TFSA balance at 60 shouldn’t make anyone feel behind. It should serve as a reminder. The account still has time. The tax shelter still has value. And the investments inside it can make a major difference.