That reality becomes especially striking when we look at the average TFSA balance for Canadians around age 50 – a stage of life when peak earning years are often in full swing and retirement planning should accelerate.
A surprising snapshot of TFSA balances at 50
According to Statistics Canada From data released in 2024 (covering the 2022 contribution year), Canadians aged 50 to 54 had an average TFSA fair market value of just $26,479. At the same time, they averaged $53,490 in unused TFSA contribution room.
In other words, roughly two-thirds of their available TFSA space was sitting idle. That’s a significant amount of tax-exempt real estate sitting unused during some of the prime accrual years.
Even if that unused contribution room were invested conservatively—for example, in a guaranteed investment certificate (GIC) yielding 3%—it could generate about $1,605 in tax-free income annually. That may not sound life-changing, but it is income that would never be shared with the Canada Revenue Agency. Over time, these missed returns can add up to tens of thousands of dollars.
The TFSA is more than a savings account
A common misconception is that the TFSA is just a place for cash or savings with low returns. In reality, it can hold a wide range of investments, including exchange-traded funds (ETFs), bonds and individual stocks.
History shows why that flexibility is important. The Canadian stock market, using iShares S&P/TSX 60 Index ETF indicatively, the past decade delivered a compound annual growth rate of roughly 13.4%. At that rate, a $10,000 investment would have grown to about $35,200 – a solid 3.5 bagger – completely tax-free within a TFSA.
That said, markets don’t move in straight lines. With the TSX returning around 32% over the past year – well above its long-term average – investors need to be selective about what they add to their TFSA today.
A TFSA-worthy stock after a pullback
One stock that has cooled off recently and may be worth considering is Thomson Reuters (TSX:TRI). This Canadian Dividend Knight is down nearly 40% from its 52-week high, largely due to valuation concerns and expectations of slower growth.
At less than $180 per share and a price-to-earnings ratio of around 33, the stock may still seem expensive. However, analyst consensus price targets suggest meaningful upside potential, with shares trading at a discount of around 32% to these targets.
Thomson Reuters benefits from a highly recurring, subscription-based business, providing essential digital information and software to legal, tax, accounting and business professionals. The growing focus on artificial intelligence (AI) further strengthens the competitive position in the long term.
The company has increased its dividend for over thirty years in a row and boasts a five-year dividend growth rate of 9.4%. At current prices, the yield is around 1.8%, making this primarily a growth-oriented TFSA holding.
Takeaway for investors
The average Canadian TFSA balance at age 50 shows a major missed opportunity. With tens of thousands of dollars in unused contribution room, many Canadians are leaving tax-free growth on the table. By going beyond simple savings and investing selectively in quality assets – such as diversified ETFs or sustainable dividend growth stocks like Thomson Reuters – investors can dramatically improve their long-term financial results by tapping into the full potential of the TFSA.
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