According to Canada Revenue Agency (CRA) statistics released in 2025 covering the 2023 contribution year, Canadians aged 60 to 64 held an average Tax-Free Savings Account (TFSA) fair market value of $45,109.
That is a respectable amount, but it is still well below the $109,000 of cumulative TFSA contribution room available in 2026 for Canadians who were eligible when the program began and have never withdrawn or missed a contribution. That gap is understandable.
Very few people have the ability to maximize their TFSA every single year while also paying for mortgages, raising families, saving for education, and dealing with the rising cost of living. Many Canadians have also prioritized Registered Retirement Savings Plans (RRSPs), workplace pension plans, or paying down debt over the years.
The important thing is not whether your balance matches the theoretical maximum. It is whether you are continuing to make good use of one of the most tax-efficient accounts available.
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Why retirees should prioritize the TFSA
The TFSA becomes even more valuable as retirement approaches. Although Canadians can begin receiving Canada Pension Plan (CPP) benefits as early as age 60, doing so permanently reduces monthly payments. Because of that, many retirees choose to delay CPP until age 65 or even age 70 to maximize their lifetime benefit.
The TFSA can help bridge that gap. Tax-free withdrawals can supplement retirement income while allowing CPP benefits to continue growing. Unlike RRSP or Registered Retirement Income Fund (RRIF) withdrawals, TFSA withdrawals do not count as taxable income.
That creates another important advantage. TFSA withdrawals do not contribute toward the Old Age Security (OAS) recovery tax, commonly known as the OAS clawback. They also do not reduce future TFSA contribution room permanently. Any amount withdrawn is added back to your available contribution room on January 1 of the following year, giving retirees considerable flexibility.
A simple all-in-one ETF for retirement
For investors around age 60 looking for a balanced long-term investment, the Vanguard Balanced ETF Portfolio (TSX:VBAL) could be a sensible core holding.
VBAL maintains a target allocation of approximately 60% equities and 40% fixed income, providing exposure to Canadian stocks, U.S. stocks, international developed markets, emerging markets, and a diversified portfolio of global bonds. The portfolio is automatically rebalanced, so investors do not need to worry about adjusting allocations themselves as markets move.
VBAL also remains competitively priced with a 0.22% management expense ratio (MER). In addition to its diversified portfolio, the ETF currently offers a 2% trailing 12-month yield, with distributions paid quarterly. For many retirees, that combination of global diversification, moderate risk, and low costs makes VBAL a practical one-ticket TFSA holding.
