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 less than half of the $109,000 in cumulative TFSA contribution room available in 2026 for someone who was at least 18 years old when the TFSA was introduced, has been a Canadian resident throughout the period, and has never contributed or made a withdrawal.
That gap is not necessarily surprising. By their early 60s, many Canadians have accumulated wealth through several different channels. Registered Retirement Savings Plans (RRSPs), defined contribution pension plans, defined benefit pensions, and home equity often represent much larger portions of household net worth. Many parents have also directed significant savings toward Registered Education Savings Plans (RESPs) while raising their families.
The TFSA has had to compete with all of those priorities. Even so, as retirement approaches, there are compelling reasons to make the TFSA one of your highest-priority investment accounts.
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Why the TFSA becomes even more valuable
One of the biggest advantages of the TFSA is flexibility. Many Canadians can begin collecting Canada Pension Plan (CPP) benefits at age 60, but doing so permanently reduces monthly payments.
Investors who are healthy and expect a longer retirement may benefit from delaying CPP until age 70, when monthly payouts are maximized. A TFSA can help bridge that gap.
Tax-free withdrawals can supplement retirement income while allowing CPP benefits to continue growing in the background. The account also works well alongside Old Age Security (OAS).
Unlike withdrawals from an RRSP or Registered Retirement Income Fund (RRIF), TFSA withdrawals do not count as taxable income. That means they do not contribute toward the OAS recovery tax, commonly known as the OAS clawback.
One ETF that fits the job
For investors approaching retirement, Vanguard Balanced ETF Portfolio (TSX:VBAL) offers a straightforward solution.
VBAL maintains a target allocation of approximately 60% equities and 40% fixed income, providing diversified exposure to Canadian, U.S., international developed, and emerging market stocks alongside a broad portfolio of global bonds. The fund automatically rebalances its holdings, so investors do not need to adjust the portfolio themselves as markets move.
VBAL currently charges a 0.22% management expense ratio and offers a 2.03% trailing 12-month distribution yield, with distributions paid quarterly. For investors entering retirement, that combination of diversification, moderate risk, and low costs makes it a sensible all-in-one TFSA holding.
