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 $37,600.
If that number sounds lower than you expected, you’re not alone. Many investors experience a bit of FOMO (fear of missing out) when they compare their TFSA balance with stories about six-figure accounts or the theoretical maximum contribution room.
The reality is that a TFSA is only one piece of the retirement puzzle. Many Canadians in their fifties have also been building wealth through home equity, Registered Retirement Savings Plans (RRSPs), workplace pensions, or paying down debt. A smaller TFSA balance does not necessarily mean someone is behind financially.
Still, the TFSA remains one of the most valuable accounts available, and improving it does not require picking the next market-beating stock. Instead, I would focus on three habits that can quietly improve long-term returns.
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Keep investing costs as low as possible
Fees may seem small in any given year, but they compound just like investment returns do. Most investors think about trading commissions first, but they are only one part of the equation.
Management expense ratios (MERs) on exchange-traded funds (ETFs), wide bid-ask spreads when buying or selling investments, and unnecessary currency conversion fees can all reduce long-term returns.
None of these costs is particularly exciting to account for, but minimizing them allows more of your money to remain invested and compound over time. Make sure you read the fine print!
Maximize your TFSA every year
One of the easiest ways to build a larger TFSA is simply to contribute consistently. For 2026, Canadians receive another $7,000 of TFSA contribution room. There is no need to overthink how you invest it.
If you have the cash available, making a lump-sum contribution is perfectly reasonable. If investing a large amount at once makes you uncomfortable, contributing monthly through dollar-cost averaging can make the process feel easier.
If you find yourself spending too much before you have a chance to invest, consider automating the process by directing a percentage of every biweekly paycheque straight into your TFSA.
Reinvest your dividends
One of the biggest drivers of long-term total returns is reinvesting distributions. Every dividend that purchases additional shares creates the potential to generate even more dividends in the future, producing a compounding effect.
It also helps shift your mindset. Instead of watching your TFSA balance fluctuate every day, think of your investments as ownership stakes in real businesses that generate cash over time.
Viewing your portfolio that way makes it easier to stay invested during market volatility and avoid emotional decisions like panic-selling based on short-term price movements.
