The Tax-Free Savings Account (TFSA) has overtaken the Registered Retirement Savings Plan (RRSP) based on data from Statistics Canada. In 2023, approximately 5 million Canadians contributed solely to the TFSA, while sole RRSP contributors numbered 3.8 million.
However, popularity doesn’t necessarily equate to high utilization. According to the Canada Revenue Agency (CRA), the average TFSA balance for the 2024 contribution year is $38,566. The figure pales in comparison to the maximum cumulative lifetime contribution limit, which reached $109,000 as of January 2026.
Another revealing reality is that the TFSA balance varies across Canada by age group, gender, and even geography. Moreover, for users aged 20–29 to 80-plus, the average balance is below the available contribution room.
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By age group
The common denominator in every age group or generation is the substantial unused contribution room left on the table. For TFSA users aged 20–29, the average balance is $9,000 to $14,000. A 29-year-old Canadian who has been eligible to open an account for 12 years, the ideal cumulative room is $78,000.
For those in their mid-50s, the maximum available limit is $109,000, covering all program years from 2009 to 2026. The average balance is between $35,000 to $43,000. It is the same total cumulative room for 80-plus TFSA users, although the average balance is $76,305.
The shared observation among financial planners is that the average TFSA fair market value steadily increases with every passing decade. It indicates that older generations have the capacity to contribute more or are in their strong earning years.
By gender
Women are ahead of men, notwithstanding the gender wage gap. The average balance of female account holders is $40,481 compared to $36,567 for male account holders. Some analysts say that saving habits, not income alone, drive TFSA success. It was also reported that 7.8 million of the total 19.3 million TFSA holders in 2024 live in Ontario.
Pre-retirement surge
The increase in TFSA balances is largely evident in the 50–59 age group. You can call it the pre-retirement surge as they play catch-up before the sunset years. The higher balances in older age groups can also be attributed to investment growth, not only new deposits.
Many Canadians use the available contribution room to purchase dividend stocks. The power of compounding works best if you reinvest dividends as you receive them. Money growth is tax-free, too, inside a TFSA.
Lifetime holding
A no-fail dividend stock you can own and hold for life in your TFSA is Bank of Montreal (TSX: BMO). Canada’s third-largest bank is the TSX’s dividend pioneer. The $177.5 billion bank has been paying dividends since 1829, a legendary track record.
BMO trades at $253.39 per share and pays a 2.7% dividend. A $50,000 investment (assuming this is the gap) will compound to $74,863.20 in 15 years, including dividend reinvestment. While the Big Bank stock may experience spikes and dips, the long-term earnings growth potential remains strong. Peace of mind is what you eventually get, not to mention pension-like income in retirement.
Use your TFSA
The TFSA is a fantastic tool to build wealth. Every unused space is a missed opportunity for tax-free compound growth. Eligible Canadians, regardless of age, stand to benefit financially by using it, not neglecting it.
