According to the latest Statistics Canada data released in 2026 for the 2024 contribution year, Canadians aged 55 to 59 held an average Tax-Free Savings Account (TFSA) balance of $43,519. Perhaps even more striking, the average unused TFSA contribution room stood at $57,618. That gap suggests many Canadians approaching retirement have yet to take full advantage of one of the country’s most powerful tax-free investing tools.
If you plan to retire around the traditional age of 65, you still have valuable years to grow your TFSA. Maximizing contributions during this period can significantly boost retirement savings, thanks to tax-free investment growth and tax-free withdrawals.
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Finding the right balance between growth and stability
As retirement draws closer, it’s natural to become more cautious with your investments. Many Canadians gradually increase their exposure to lower-risk assets, such as guaranteed investment certificates (GICs), to help preserve capital and generate predictable income.
However, retirement can easily last two decades or longer. Statistics Canada estimates life expectancy at roughly 80 to 84 years, with women generally living longer than men. A portfolio invested too heavily in low-return assets may struggle to keep pace with inflation and the income needed throughout retirement.
Instead, many investors benefit from dividing their portfolio into different buckets. Money needed within the next one or two years can remain in cash or other low-risk investments, while funds that won’t be required for at least three to five years can stay invested in bonds and stocks. This approach allows investors to better weather market downturns while maintaining long-term growth potential.
A simple, diversified option
One of the most widely used asset allocations for investors nearing retirement is 60% stocks and 40% bonds. Canadians looking for a simple and straightforward solution can consider iShares Core Balanced ETF Portfolio (TSX: XBAL).
The exchange-traded fund (ETF) maintains a target allocation of approximately 60% equities and 40% fixed income. It holds a portfolio of ETFs and automatically rebalances to maintain its target mix, removing the need for investors to make regular adjustments themselves.
Its management expense ratio is relatively low at 0.19%, and it recently offered a distribution yield of about 3.1%, paid quarterly. Over the past decade, the fund has generated an annualized return of roughly 8%, demonstrating the long-term benefits of staying invested through different market cycles.
Be selective with individual stocks
Investors who prefer building their own portfolios can explore for opportunities in high-quality Canadian companies with durable competitive advantages.
For example, Toronto-Dominion Bank (TSX: TD) remains one of Canada’s leading financial institutions and deserves a place on Canadians’ watchlists. However, valuation matters. After a strong rally since 2025, the TD stock price has reached around $171 at the time of writing, representing a blended price-to-earnings (P/E) ratio of about 18.5. That’s well above the bank’s historical average, suggesting the stock may be trading at a hefty premium. Waiting for a more attractive entry point could improve long-term return potential.
Investor takeaway
The average Canadian approaching age 60 still has substantial unused TFSA contribution room, creating an excellent opportunity to strengthen retirement finances before leaving the workforce. Rather than becoming overly conservative, maintaining a balanced portfolio that combines stability with long-term growth would probably help your savings last throughout retirement.
Whether you prefer an all-in-one balanced ETF or carefully selected individual stocks, making thoughtful investment decisions today can improve your financial security for years to come. If you’re uncertain about the right strategy, consulting a qualified financial planner can help you build a retirement plan tailored to your goals.
