Are you saving enough in your registered savings accounts? We looked at Statistics Canada data on the average balance of Canadians at age 45. But the data is divided into the 40–44 age group for the Tax-Free Savings Account (TFSA) and the 35–44 age group for the Registered Retirement Savings Plan (RRSP). We have considered this age group to determine the balance at age 45. According to the stats, Canadians had an average TFSA balance of $20,670 and an average RRSP balance of $82,100 in the 2023 tax year.

Why is there a huge gap between TFSA and RRSP average balance?

The RRSP contribution room gets generated when you start earning and filing taxes. The contribution is 18% of the income or the maximum limit set by the Canada Revenue Agency (CRA). However, TFSA contributions are the same for all Canadians.

The average RRSP balance of $82,100 is far from the median balance of $30,000. The median is the mid-point of the RRSP balance range. When the average is near the median, it is a normal distribution curve. However, in this case, the average RRSP balance is skewed towards the high-income group. Another proof of this was visible in the RRSP contributions by income group.

While the median TFSA contributions were evenly spread across the income groups, median RRSP contributions jumped significantly for tax filers with income above $80,000.

This data shows that high-net-worth Canadians use RRSP contribution room to take advantage of its tax deductions. As a TFSA doesn’t provide any tax deduction, Canadians of all age groups invest in it to take advantage of its tax-free income and wealth.

While a TFSA has the flexibility to withdraw any amount at any time tax-free, an RRSP taxes the withdrawals. The money you don’t need for the long term goes into an RRSP.

An ideal stock for a TFSA

The TFSA contributions are made from the after-tax income. Since you have already paid tax on it, you can invest that money in stock trading on renowned public exchanges like the TSX and NASDAQ. You pay no tax on the investment income you earn and withdraw. That makes it ideal for stocks that can generate wealth by growing your money multiple-fold.

Kinross Gold (TSX:K) is one of the largest gold miners, having mines across multiple countries. It produced 2 million oz of gold in 2025 and aims to maintain this production in 2026. The miner has an all-in-sustaining cost of $1,571 per oz in 2025, which it expects to grow to $1,730 in 2026. All Canadian gold miners have one of their strongest balance sheets, as they used the windfall gains to pay down debt. Kinross has $750 million in debt maturing in 2033 and 2041 and a net cash position of $1 billion in 2025.

Gold is currently trading above US$4,800/oz and could surpass US$5,000/oz, leaving a good annual margin for Kinross. Its stock price surged 100% in the last 12 months, with pockets of 22–30% jumps in certain months. The stock has already surged 28% since its March dip as the Iran war pulled down gold prices. You can buy at every dip or every quarter and make the most of the gold price rally. This strategy can help you beat the market in 2026.

An ideal stock for an RRSP

RRSP withdrawals are taxable and do not provide a tax benefit after retirement. Thus, you want more conservative stocks with assured returns even in a crisis. Enbridge (TSX:ENB) is perfect for RRSPs with its 5.4% annual dividend yield and a strong history of 30 years of dividend growth. Enbridge’s dividend is likely to grow by 5% from 2027 onwards, helping you fight inflation.

Enbridge manages to pay dividends from the toll money it collects for transmitting oil and gas between Canada and the US. It is increasing the natural gas pipeline to tap Asian markets for exports.

The post Here’s the Average Canadian TFSA and RRSP Balances at Age 45 appeared first on The Motley Fool Canada.

More reading

• 2 No-Brainer Dividend Stocks to Buy Hand Over Fist
• Oil Is Back in Focus: 3 Canadian Stocks to Watch Now
• 2 High-Yield Dividend Stocks for Stress-Free Passive Income
• 3 Stocks That Could Turn a $100,000 Portfolio Into $1 Million Sooner Than You Might Think
• How to Use a TFSA to Generate $363 in Monthly Tax-Free Income

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

The April 30 tax filing deadline is nearing. You must be busy crunching the numbers, finding tax savings possibilities. It is already too late to invest in a Registered Retirement Savings Plan (RRSP) and claim a deduction on the contributed amount for the 2025 tax year. While an RRSP can’t help you reduce your 2025 tax, a Tax-Free Savings Account (TFSA) can help you earn investment income equivalent to the amount of tax savings.

Millionaires and investors always look for ways to earn more to make up for losses and devise a strategy to not repeat the mistake.

1 move to compensate for a missed RRSP deadline

The Canada Revenue Agency (CRA) allows Canadians to contribute 18% of their taxable income from the previous year up to a certain limit (2025 limit of $32,490). Even if you missed your RRSP deadline, the 2025 contribution room will carry forward to next year.

What you can do is invest the amount you planned for an RRSP in a Tax-Free Savings Account (TFSA) if you have sufficient TFSA contribution room. Even a TFSA can help you build a retirement pool. In fact, its tax-free withdrawals are a much better mode of retirement passive income than an RRSP’s taxable withdrawals.

The TFSA will take care of the retirement savings. As for tax savings, you can invest in growth stocks now and earn back the amount paid in taxes through capital gains, which you can withdraw tax-free.

Compensate RRSP tax savings with TFSA income

Suppose Amy has an annual taxable income of $80,000 in 2024. Her RRSP contribution room is $14,400. She planned to invest $7,000 in an RRSP in 2025 and achieve tax savings of $1,435 at a 20.5% tax rate, but missed the deadline.

Amy can instead invest that $7,000 in a TFSA, as that is the 2026 contribution limit set by the CRA. That amount can be invested in Shopify (TSX:SHOP) or Kinross Gold (TSX:K) as these stocks could surge more than 20% in the next six to eight months. Had you invested this amount in these stocks through an RRSP, the withdrawals up to $5,000 would be taxed at 10% and between $5,001 and $15,000 at 20% until retirement, negating the current tax savings.

Even though you pay the $1,435 tax now, the $7,000 TFSA investment can earn you way more than $1,435 in the long term, and all that amount would be tax-free. Shopify can double your money in five years with its consistent 30% revenue growth and double-digit free cash flow margins, adding to its share price.

Kinross Gold’s share price could rally as the gold price increases amid central bank buying. The tariffs, wars, and increasing credit risk of US Treasuries could push central banks to increase their gold reserves. Since gold supply is limited, the gold price could double in a year. The gold stock has already surged 29% from the March dip due to the Iran war. Those who bought the dip have already recovered the 20.5% tax rate through capital appreciation.

1 move to avoid missing the RRSP deadline in the future

While a TFSA presents a good opportunity, one should also make the most of an RRSP. The key reason for missing the RRSP deadline is last-minute tax planning. Instead, one should make investing a habit. Consider investing $500 per month in an RRSP. It will not be heavy on your pocket. Plus, you can take advantage of dollar-cost averaging and reduce your overall cost per share.

An ideal RRSP stock to invest $500 per month in is a dividend stock like Granite REIT (TSX:GRT.UN). Granite REIT’s stock hovers between $65 and $80 throughout the year, because of which its annual yield is in the 3.6–5.5% range. The REIT gives monthly payouts, which you can reinvest, as RRSP withdrawals are taxable.

Staying invested in the long term can help you benefit from the 4% average annual dividend growth. This REIT’s key advantage is its portfolio of 141 warehouse and distribution centres across North America and Europe.

Investor takeaway

There is always an alternative to missed opportunities if you look carefully and change your approach. Never stop investing, as the market rewards those who spend time in the market.

The post Missed the RRSP Deadline? Here’s 1 Move to Make Now appeared first on The Motley Fool Canada.

More reading

• Here’s the Average Canadian TFSA and RRSP Balances at Age 45
• 3 Stocks That Could Turn a $100,000 Portfolio Into $1 Million Sooner Than You Might Think
• A Dependable 4% Dividend Stock That Pays You Every Month
• What the Average Canadian TFSA Balance Looks Like at Age 50
• 2 Canadian Stocks That Offer Both Growth and Dividends in One Portfolio

The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Granite Real Estate Investment Trust. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned.

The Canada Revenue Agency (CRA) offers certain cash retirement benefits, such as Canada Pension (CPP) and Old Age Security (OAS), to help retirees meet their basic needs. These benefits are structured to cover your food, clothing, and utilities. If you are still living in a rented apartment or your medical bills are high, CPP and OAS won’t be enough to cover your expenses.

How much of expenses does CPP and OAS cover

The January 2026 average monthly CPP payout at age 65 was $925.35. The monthly OAS for the April to June 2026 period is $742.31 if your 2024 income is below $148,451.

Adding up the two benefits, a 65-year-old single Canadian can get $1,668.4 per month in retirement benefits.

You can look at your current expenditure and calculate the gap. Excluding rent, the gap between your expenses and CPP and OAS payouts could be in the range of $1,000–$1,500 per month.

How to bridge the $1,000 expense gap that CPP and OAS won’t cover  

Retiring can be scary when you don’t have the savings to fall back on. Calculating your future retirement needs can help you build a retirement pool sufficient to fill the gap left by OAS and CPP. Considering a $1,000 monthly passive income as your end goal and the 5.5-6% average annual dividend yield, you can come up with the amount that should be there in your retirement pool.

A $200,000 portfolio that pays 6% annual dividend can fill the gap. If you have that much balance in your Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP), you can consider SmartCentres REIT (TSX:SRU.UN) and Enbridge (TSX:ENB).

Hypothetically speaking, if you invested $100,000 in each of the two stocks, you would come close to the target of $12,000 in annual passive income.

SmartCentres REIT

SmartCentres REIT is in the middle of a large intensification project, wherein it is looking to convert shopping centres into city centres. Thus, its debt is on the higher side. It is using that money to build mixed-use facilities, sell most of them, and increase the market value of its store. This way, it is making optimum use of the land in and around the retail store, especially the underused parking space. It repays debt by selling the apartments and offices. The rental income continues to come from retail stores.

SmartCentres biggest tenant is Walmart, accounting for 23% of its rental revenue. This percentage has reduced over the years as the REIT has been adding new stores and diversifying tenants. It can be a reliable passive income provider as it has passed the test of time and managed to withstand the worst of the crises without dividend cuts. SRU.UN has a 21-year dividend-paying history.

Enbridge

Enbridge is an evergreen passive income stock. However, now may not be a good time to invest a lump sum as the stock trades at its all-time high amidst the energy shock. You could add it to your watchlist and buy it when the stock falls to $60–$65. When the stock has a dividend yield of 6% and above, that is the ideal time to buy.

Enbridge is focusing on increasing its natural gas infrastructure and is on track to bring US$8 billion worth of pipeline projects online. The toll money from these projects will help the company to accelerate its dividend growth rate to 5% in 2027 from the current 3%. This growth will help beat inflation.

How to invest to generate your personal pension

Investing $200,000 in one go may not be a good option. Even a TFSA’s cumulative limit is $109,000. If you still have five years to retire, consider maxing out on your TFSA contribution room first, as RRSP withdrawals are taxable and can claw back OAS if all your taxable income adds up to the threshold. You can invest in some growth stocks like Shopify to grow your TFSA portfolio and keep rebalancing profits into dividend stocks.

The post How to Bridge the Gap When CPP and OAS Won’t Cover Your Expenses  appeared first on The Motley Fool Canada.

More reading

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• Oil Is Back in Focus: 3 Canadian Stocks to Watch Now
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• 2 High-Yield Dividend Stocks for Stress-Free Passive Income

The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Enbridge, SmartCentres Real Estate Investment Trust, and Walmart. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned.

The average Registered Retirement Savings Plan (RRSP) balance of Canadians over 65 is $756,497, as per 2023 data from Statistics Canada. Is this sufficient for retirement? Not exactly. But the RRSP is not the only source of income in retirement.

Remember, the Canada Revenue Agency (CRA) created RRSPs to encourage individuals to save for retirement by offering them the option to deduct contributions from taxable income.

When an RRSP matters the most

The RRSP matters the most when you have a high income, as it can help you save tax. You can contribute to an RRSP and keep carrying forward the unused contribution to use all the accumulated unused contribution in the years you earn significant taxable income.

When an RRSP doesn’t matter much

However, the RRSP balance doesn’t matter much after retirement, as withdrawals are taxable. Moreover, you cannot completely control RRSP withdrawals after retirement. An RRSP is active till age 71, after which you have to transfer to a Registered Retirement Income Fund (RRIF) to avoid getting taxed on your RRSP balance. The RRIF has a minimum withdrawal amount, which is determined by your age and RRIF balance, and is taxable income. You can withdraw more, but a withholding tax will apply.

Also, RRIF withdrawals can affect your Old Age Security (OAS) pension amount, which depends on your taxable income.

Overall, RRSPs are not quite tax-efficient after retirement.

Three things that matter more than an RRSP in retirement

TFSA

A better and more tax-efficient withdrawal option in retirement is the Tax-Free Savings Plan (TFSA). TFSA withdrawals are not included in taxable income, and you can continue contributing and withdrawing from a TFSA even after age 71. This account helps you invest even after you retire, while the RRSP doesn’t. So, if you see an opportunity whereby a $2,000 investment can grow to $3,000 in a year because of a cyclical upturn, you can invest in a TFSA, irrespective of your age.

At present, Lundin Gold and Shopify (TSX:SHOP) have such an opportunity. Shopify can give you a 50% upside this holiday season as it integrates artificial intelligence (AI) to help merchants sell more. Merchants opting for AI solutions will help Shopify earn more revenue from merchant solutions and tap new channels for optimizing the shopping experience. The stock has dipped in March because of seasonality, like every normal year, creating a buying opportunity. Retirees can allocate a small portion towards such growth stocks.

CPP

Another thing that matters the most after retirement is the CPP. The CRA determines the CPP payout depending on the best 39 years of your contributions, but you can choose when to start your payout. The ideal age is 65. If you take an early payout at 60, the amount will reduce by 7.2% per year, and if you postpone till 70, it will increase by 8.4% annually.

OAS

You made contributions for CPP, RRSP, and an employer pension. However, OAS is a benefit funded by the CRA, and you don’t want to miss it. OAS payments are significant and taxable. The monthly payment for the January to March 2026 period is $742.31, which you can get if your 2024 taxable income was less than $148,451. Any income beyond this threshold might trigger the OAS clawback.

Investor takeaway

Retirement planning is not just about having a high RRSP balance. You also have to consider post-retirement taxes and diversify the income streams that give you control over your payout. Combining an RRSP with a TFSA, CPP, and OAS ensures more control over payouts and a tax‑efficient retirement strategy.

The post Your RRSP Balance Doesn’t Matter as Much as These 3 Things in Retirement appeared first on The Motley Fool Canada.

More reading

• 3 Stocks That Could Turn a $100,000 Portfolio Into $1 Million Sooner Than You Might Think
• What the Average Canadian TFSA Balance Looks Like at Age 50
• 5 Canadian Stocks Worth Buying Today and Holding for the Next 5 Years
• Missed the RRSP Deadline? Here’s 1 Move to Make Now
• 1 Top Growth Stock to Buy in April

The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned.

The average retirement age in Canada is 65, but some prefer early retirement or a career break at age 45, making retirement planning challenging. The Registered Retirement Savings Plan (RRSP) cannot adapt to such changes, but a Tax-Free Savings Account (TFSA) can.

The average TFSA balance of Canadians in the 45–49 age group is $24,150, as per 2023 tax year data from Statistics Canada. The median RRSP balance for Canadians in the 45–54 age group is between $70,000 to $72,600. Is it right to invest more in an RRSP than TFSA, even when you have ample TFSA contribution room?

TFSA vs. RRSP: When you want to retire at age 45

There is a misconception that only RRSPs can be used for retirement. But in reality, the RRSP balance does not matter much after retirement.

The logic behind the RRSP is that you have a high tax liability during your work life and a lower tax liability in retirement, as you earn less. The RRSP allows you to deduct your contributions from your taxable income. But after you retire, you have to transfer the money into a Registered Retirement Income Fund (RRIF), which will give you a minimum withdrawal that will be taxable.

If you retire early at age 45 and want to withdraw passive income from an RRSP, it will be subject to withholding tax.

The TFSA gives that flexibility. You contribute your after-tax income to your TFSA. Once inside a TFSA, your investments can grow tax-free, and you can withdraw your TFSA balance as per your financial needs, with no minimum or maximum limit, and no taxes.

Understanding TFSA retirement

Let’s take a hypothetical situation. You invested $15,000 in Nvidia (NASDAQ:NVDA) in 2016 and left it to grow. Today, you open your TFSA and see that the amount has become $3.4 million. That’s more than enough for you to retire. You can simply move some of this amount to dividend stocks that pay monthly or quarterly dividends. A 6% yield on $1 million comes to $60,000 annually.

The TFSA is the only account that will make these capital gains and passive income tax-free. And your withdrawals will be added to your contribution room on January 1 of next year. No obligation, but an option to contribute more to a TFSA.

Had this same investment been made in an RRSP, the $60,000 dividend income would attract 30% withholding tax, and you would be under an obligation to recontribute that amount in an RRSP. Thus, the TFSA is a better choice if your financial goal is wealth creation and financial flexibility on your invested amount.

Understanding RRSP retirement

The RRSP has more benefits before retirement than after retirement. The Canada Revenue Agency (CRA) allows you to contribute 18% of your taxable income to an RRSP up to a maximum limit. Whatever you contribute, you can deduct from your taxable income. You can deduct it today or in a future year when your taxable income is high.

A smart investor may accumulate and carry forward RRSP contributions and claim the tax deduction when they realize a major gain from the sale of property or investment. It is a good tax planning tool.

But when it comes to retirement, RRSP withdrawals are taxable. It is simply deferring tax to a date when you withdraw the amount. Technically, you are also paying tax on your investment income. Suppose you invested $15,000 in Enbridge (TSX:ENB) in 2016 through an RRSP and got 316 shares. In 10 years, those shares paid cumulative dividends of $11,074, and their value increased to $24,237.

If you withdraw $16,000 at age 45, you will get $11,200 as your financial institution will withhold 30% tax, even if you fall under the 20.05% tax bracket. While the withholding tax will be adjusted to your tax liability, you have to recontribute that amount to the RRSP as per the schedule provided by the CRA.

RRSP withdrawals are not tax-efficient nor flexible, making dividend stocks a better investment option.

The post Here’s the Average TFSA and RRSP at Age 45 appeared first on The Motley Fool Canada.

More reading

• 2 No-Brainer Dividend Stocks to Buy Hand Over Fist
• Oil Is Back in Focus: 3 Canadian Stocks to Watch Now
• 2 High-Yield Dividend Stocks for Stress-Free Passive Income
• Here’s the Average Canadian TFSA and RRSP Balances at Age 45
• How to Use a TFSA to Generate $363 in Monthly Tax-Free Income

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge and Nvidia. The Motley Fool has a disclosure policy.

The Tax-Free Savings Account (TFSA) contribution limit is $7,000 for 2026. What is this $109,000 opportunity? The way TFSA works is you need to be a Canadian above 18 years of age and have a Social Insurance Number (SIN). If you met all three conditions in 2009, the TFSA contribution room has been accumulating for you. In the last 18 years, the total contribution room, including the $7,000 limit for 2026, is $109,000.

Something about the $109,000 TFSA opportunity

If you have been contributing to the TFSA, that amount is reduced from the $109,000 room. The ideal scenario would be you maxing out the TFSA every year. Even if you kept the cash as it is, you would have a $109,000 TFSA balance.

But given that the average TFSA balance of a 40-year-old Canadian is around $20,000, many people are not using this account to its fullest. When you check your TFSA contribution room on My CRA Account, you will be amazed to see the available contribution room because your previous year’s withdrawals are added to the contribution room the next year.

How do you stack up the TFSA opportunity?

If you have contribution room of over $100,000, it means you can invest that amount in a TFSA. Whatever your investment earns will be tax-free. A $109,000 investment in 6% dividend yield stock can earn you $6,540 passive income annually. If the same amount is invested in a portfolio of stocks that annually generate 10% returns, then a $10,900 tax-free capital gain would add to your TFSA balance.

However, these numbers are benchmarks. You don’t have to lose your night’s sleep over investing $109,000. You can gradually stack up your TFSA investments as you get extra cash, such as a bonus, proceeds from the sale of your old car, or maturity on an investment.

In fact, Statistics Canada data shows that Canadians, on average, contributed $10,520 in 2023, with those over 65 years of age contributing more than $13,000. In that year, the TFSA contribution limit was $6,500. Suppose you contribute $10,000-$14,000 annually, you can easily play catch-up to the unused contribution room.

Ideal TFSA strategies to stack up $109,000

The benefit of a TFSA is that all your investment income, be it from interest, dividends, or capital gains, is tax-free. It doesn’t add to your taxable income when you withdraw. That means you can still use Old Age Security pension and other benefits that depend on your income level. The right strategy for TFSA is the one that can triple your money in 10 years.

Rebalancing your TFSA portfolio

A wealth-generating strategy is to invest in two to three high-growth stocks, like Celestica and Constellation Software (TSX:CSU), at their dip and rebalance your portfolio annually. In rebalancing, you sell a portion of shares and book profits when the shares are at their high. The capital gain realized is reinvested in other stocks that are trading at their low or in dividend stocks, depending on your strategy.

For instance, let’s say you invested $5,000 in Celestica in March 2023, which has become $15,000. You can sell shares worth $7,000 and invest it in Constellation Software, which is trading near its multi-year low. This way, your Constellation shares are brought purely from profits. They have dipped more than 50% amidst artificial intelligence (AI) woes and a slowdown in software spending. However, it continues to report double-digit revenue and free cash flow growth.

The stock could surge when the market revives, or the company makes a game-changing acquisition or adopts AI in its software products. It reinvests the free cash flow to make new acquisitions, and this has helped it compound its portfolio value in the long term. Constellation could double your money in five years or even less if the recovery kicks in.

Compounding with a DRIP

Another strategy is to invest in a dividend-reinvestment plan (DRIP) of a dividend-growth stock like Telus Corporation or Manulife Financial. The dividends will accumulate more income-generating stocks, and dividend growth will give inflation-adjusted passive income. A 3% average dividend-growth rate can double your dividend income in 10 years.

The post The $109,000 TFSA Opportunity: How Do You Stack Up? appeared first on The Motley Fool Canada.

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• 3 Canadian Stocks That Are Nearly Perfect for a $7,000 TFSA Investment

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Celestica, Constellation Software, and TELUS. The Motley Fool has a disclosure policy.

Albert Einstein called compound interest the “eighth wonder of the world”: “He who understands it, earns it; he who doesn’t, pays it”. The math behind compound interest has made patient investors millionaires. The secret of a TFSA millionaire lies in combining compounding returns with the tax‑free growth of the Tax‑Free Savings Account (TFSA). With discipline and strategy, even two to four stocks can make you a TFSA millionaire.

Maxing out on the TFSA contribution room

Your TFSA contribution room started accumulating when you turned 19. The secret to becoming a TFSA millionaire is filing returns even if you don’t have any tax liability. This ensures you accumulate contribution room and tax credits for the future.

So, if you are 19, make sure to get a Social Insurance Number to start accumulating TFSA contribution room. Those who turned 19 in 2009 have a contribution room of $102,000 at the end of 2025. With just a 5% average return, that portfolio could grow to $159,663 — a conservative path to becoming a TFSA millionaire.

Note that even Enbridge gives an average dividend yield of 6.5%, before including any capital gain and dividend growth. This is a conservative portfolio, the bare minimum a disciplined investment can earn.

Using TFSA’s tax-free growth to its fullest

TFSA allows your money to grow tax-free. Selling stocks to book profits and reinvesting them in growth opportunities is a key TFSA Millionaire strategy. A perfect example of rebalancing in the current market would be Suncor Energy (TSX:SU) and Shopify (TSX:SHOP). Suncor stock has surged a whopping 226% in five years, converting $5,000 into $16,273, excluding dividends. A similar investment in Shopify is now $5,934.

Back in March 2021, Shopify stock was trading in a bubble and corrected sharply in the 2022 tech meltdown, which resulted in lower returns. However, the company has restructured since then and even turned profitable, with consistent returns. In November 2025, the stock even broke its 2021 tech bubble peak and has dipped 33% since then. This dip is seasonal, as the first quarter is always slow for the company.

Now is a perfect time to rebalance as Suncor may not be able to hold its all-time high price for long and might see some correction depending on the developments in the Iran war.

A smart TFSA millionaire plan would be to rebalance — sell part of Suncor (shares worth $6,000) at its high and reinvest in Shopify during seasonal dips. This way, you book the profit and reinvest that amount to compound in Shopify’s seasonal rally in the second half. Meanwhile, you will still own Suncor stocks, which will keep paying dividends. If you invest in the Suncor dividend-reinvestment plan (DRIP), your dividend will keep compounding tax-free.

TFSA makes this entire rebalancing strategy tax-free, which would otherwise have attracted dividend and capital gain tax in a non-registered account.

Investor takeaway

Rebalancing and compounding are the foundations of becoming a TFSA millionaire. Rebalancing and compounding can help you make the most of your TFSA contribution room. However, avoid frequent buying and selling of stocks in the name of rebalancing. The Canada Revenue Agency (CRA) does not allow trading in a TFSA. While it has no specific guidelines around investing frequency, buying and selling the same share multiple times in a year and having a holding period of just a few months could attract CRA’s attention. A disciplined approach — rebalancing every two to three years — ensures steady growth without penalties.

The path to becoming a TFSA millionaire is not about chasing every rally but about consistent contributions, patient compounding, and tax‑free reinvestment.

The post The Secrets That TFSA Millionaires Know appeared first on The Motley Fool Canada.

More reading

• 3 Stocks That Could Turn a $100,000 Portfolio Into $1 Million Sooner Than You Might Think
• What the Average Canadian TFSA Balance Looks Like at Age 50
• The Canadian Stocks I’d Buy First If I Had $2,000 to Put to Work Today
• 5 Canadian Stocks Worth Buying Today and Holding for the Next 5 Years
• Missed the RRSP Deadline? Here’s 1 Move to Make Now

The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned.

The Registered Retirement Savings Plan (RRSP) was designed to help Canadians save for their retirement from the day they start earning. To encourage retirement savings, RRSPs allow you to deduct contributions from your taxable income. The deadline for 2025 tax year contributions was March 2, 2026. If you missed it, you may still benefit from unused contributions. Let’s break this down.

How do RRSP deductions work?

When you contribute to the RRSP, you have the option to deduct the amount contributed from your taxable income and reduce your tax liability. This is an option — you can choose to use it now or carry it forward.

• Unused RRSP contribution: If you don’t use your RRSP contribution to reduce your taxable income, it gets carried forward to next year. It is called “unused RRSP contribution”. Even if you are not using the deduction, you still have to report the contribution amount on your tax return.
• RRSP contribution room: The maximum amount you are allowed to contribute, based on 18% of your previous year’s taxable income (up to a CRA‑set limit).

It’s important not to confuse the contribution room with unused contributions. Contribution room is your limit, while unused contributions are actual deposits you’ve made but not yet deducted.

Why would anyone delay an RRSP deduction?

There are multiple reasons for this: one may have surplus cash to invest now, or their income tax liability is not high enough to claim deductions, or they are accumulating unused contributions to claim in the year they earn more.

For instance, William earned $60,000 in 2024 and contributed $5,000 to an RRSP, but did not use that amount to deduct taxable income. In 2025, he earned $125,000 after selling his cottage. He can now use the unused RRSP contribution to reduce taxable income when it has a bigger impact.

Most Canadians avoid investing in RRSPs as the withdrawals are taxable. But note that your RRSP only begins when you start earning and filing returns. Unlike a Tax-Free Savings Account (TFSA), the RRSP contribution limit is 18% of the previous year’s taxable income up to the maximum contribution limit. Taking the previous example, William’s 2024 RRSP contribution limit was $10,800, while his 2025 limit was $22,500. If his 2026 earnings are lower than $125,000, his contribution limit will be reduced.

Suppose you are looking to sell a property or have been building wealth in non-registered investment accounts, you might want to accumulate unused RRSP contributions and claim them in the year you realize a capital gain.

The next move: Invest smartly in your RRSP

RRSPs are powerful tax-planning tools when used strategically. Try investing regularly in this account even if your taxable income is modest. Not only will the unused contribution help you reduce taxable income in the future when you earn more, but it will also help you grow your investments tax-free.

Once the money is deposited in the RRSP, you can invest it in stocks trading on renowned public exchanges, term deposits, and ETFs. You can rebalance your RRSP portfolio tax-free by buying and selling stocks. Ideal stocks are the ones that you can buy and hold for the long term.

TC Energy Stock

TC Energy (TSX:TRP) is a good RRSP candidate due to its regular dividends, dividend growth, and dividend reinvestment plan (DRIP). The gas pipeline company is currently at the cusp of growth as the shift in global energy exports makes Canada a strong candidate for stable and reliable energy sources. Its stock price has surged to an all-time high because of the energy shock from the Iran war, which disrupted the supply chain.

Instead of buying at the peak, consider dollar‑cost averaging — investing $200 monthly. This strategy reduces your average cost over time and builds wealth steadily without straining your budget.

The post Missed the RRSP Deadline? Here’s 1 Move to Make Now appeared first on The Motley Fool Canada.

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Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

A Tax-Free Savings Account (TFSA) is one of the most liquid registered savings accounts. It allows you to withdraw your balance partially or completely, tax-free. Canadians have been using this flexibility and treating TFSA as a normal savings account for their immediate cash needs.

When you reach 50, retirement savings take priority over other things. Yet the TFSA fair market value of Canadians in the 50-54 age group was only $30,190 in the 2023 tax year, according to Canada Revenue Agency’s (CRA) latest TFSA statistics. That is 34% of the cumulative TFSA contributions of $88,000 in 2023.

How much Canadians typically have in a TFSA by age 50

The $30,190 TFSA value was for 2023. But if we look at 10 years of data, Canadians typically have a TFSA balance of 35% of cumulative contributions by age 50. A major reason for the lower TFSA balance is probably consistent withdrawals.

If we look at the TFSA withdrawals, they were lower than the contributions until 2021. However, withdrawals increased or were in line with contributions in 2022 and 2023. The TFSA contributions spiked in 2020 and 2021 as people had a few things to spend on during the lockdown, and they received the Canada Emergency Response Benefit (CERB). The contribution fell, and withdrawal increased in 2022 when the lockdown ended, and consumption increased. This was the year of revenge travel, high inflation, and tech stock meltdown.

Canadians have been withdrawing their savings from their TFSA to meet short-term needs.

Why is that so?

TD Bank surveyed Canadians between October 24 and 27, 2025, and found that 39% of Canadians who have a TFSA are not investing the money in it. One core reason for it is to have funds readily available. That explains the lower balance and consistent withdrawals.

The TFSA savings trend of Canadians who turned 50 in 2023 shows they increased their contributions with time. And despite the withdrawals, their TFSA balance doubled in five years.

How to make the most of your TFSA

Even after consistent withdrawals, the average TFSA balance doubled in five years because the account allows your money to grow tax-free. It means that if you sell a stock for capital gain and reinvest that money to buy a new stock, you do not pay any tax. Had it been any other account, you had to pay tax. This tax-free compounding can help you build a million-dollar portfolio.

You don’t need too many stocks to invest in a TFSA. Only a handful of stocks that you are confident about can help you build wealth. The trick is to stay invested and keep investing for the long term.

Constellation Software (TSX:CSU) is a good TFSA growth stock to buy. It has generated 20% compounded annual growth rate in 10 years. Its share is currently trading closer to its three-year low as the artificial intelligence (AI) boom and management change sparked fear among investors.

The uncertainty around AI’s impact on traditional software has affected every software company. Many investors view this as a threat and are avoiding software. However, Constellation continues to acquire vertical-specific software (VSS) companies that operate mission-critical applications.

Constellation is interested in cash flows. On the one hand, VSS enjoys regular cash flow from maintenance fees. On the other hand, AI is yet to generate returns that can justify its huge investment and energy needs. Even though AI will be disruptive, it will have vertical-specific versions. Once AI proves to be a good return on investment generator, Constellation could tweak its acquisitions in vertical-specific AI companies.

Now is a good time to buy Constellation at its dip and lock in future growth rally.

The post How Much Canadians Typically Have in a TFSA by Age 50 appeared first on The Motley Fool Canada.

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The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned.

Canadians who know how to use their Tax-Free Savings Account (TFSA) have made millions in tax-free wealth. The CRA’s TFSA statistics for the 2023 tax year say it all. Canadians in the 50–54-year age group made a total TFSA contribution of $8.2 billion and had a total fair market value of $40.4 billion, which is almost five times their contribution.

The secrets that TFSA millionaires know

Even you can become a TFSA millionaire if you know the secret to making the most of this account.

Secret #1: Regular investing in your TFSA

If you had been maxing out on your TFSA contribution since 2009, your invested amount alone would have touched $109,000. Assuming you consistently contribute $7,000 to TFSA annually for the next 20 years and earn an average annual return of 10% on your portfolio, you can have a $1.17 million-dollar TFSA portfolio.

The trick is to invest as much as you can in the early stages of your life. So if you invest less in the latter stage, you will still be able to meet your financial goals as the power of compounding will fill the gap of incremental investment.

You don’t need too many stocks, just a balance of a few growth and dividend stocks that can bring your average portfolio return to 10%.

Secret #2: Reinvesting dividends

The biggest mistake most Canadians make with their TFSA is making consistent withdrawals. While the account gives you the flexibility to withdraw anytime, one should understand the opportunity cost of that one withdrawal. Suppose you contribute $7,000 in 2026 and withdraw your dividend amount even when you don’t need that extra cash. By doing so, you are losing the opportunity to reinvest that dividend without overcontributing and limiting that money to its dollar value as of that date.

Manulife Financial (TSX:MFC) is a good dividend stock not for its 3.9% dividend yield but for the 10% average annual dividend growth it has given shareholders for the last 12 years. The insurer has once again raised its 2026 dividend by 10.2%, showing the company’s ability to pay dividends. Generally, the companies that offer high dividend growth do not offer a dividend reinvestment plan (DRIP). But Manulife Financial even offers DRIP, allowing you to compound your returns.

Had you invested $10,000 in Manulife in 2016, you would have gotten 490 shares. The dividend growth would have increased your annual dividend from $362.60 in 2016 to $950.60 in 2026, and your investment value to $24,514 (490 shares x $50.03).

DRIP could have enhanced your dividend amount to $1,432 in 2026, and your investment value to $37,000 (739 shares x $50.03) as the share price and share count both increase.

Secret #3: Choosing opportunistic growth stocks

TFSA millionaires know that they don’t have to pay tax on capital gains from US stocks. Thus, they look to invest in opportunistic growth stocks that can double or triple their money in three to five years, book a profit, and look for other growth cycles. NVIDIA (NASDAQ:NVDA) enjoyed the artificial intelligence (AI) growth cycle from November 2022 to 2025, surging 1,300%.

It is almost impossible to predict such growth cycles, but you can tell that this cycle has more upside. Those who jumped the Nvidia growth cycle in November 2023 still tripled their money. The stock growth cycle has paused as investors wait and watch the return on the AI models built so far before investing more.

The next three years will see the investment put to work, with new AI data centres. This has created an acute shortage of memory chips, driving Micron Technology’s share up 330% in a year. If you invested in Nvidia, you could consider selling it and buying Micron.

The post The Secrets That TFSA Millionaires Know appeared first on The Motley Fool Canada.

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Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Micron Technology and Nvidia. The Motley Fool has a disclosure policy.