According to a detailed report from Blueprint Financial, the average Tax-Free Savings Account (TFSA) balance for Canadians aged 55 to 59 is approximately $33,200.
This number is well below what financial experts recommend for this age group, as many savers are approaching the final stretch before retirement. The TFSA balance for the 50-54 age group is approximately $26,400, while in the 60-64 age group it rises to $39,750.
The relatively modest balances are the result of inconsistent premiums and low-interest savings products. Several Canadians use the TFSA as a “savings account” rather than an “investment account,” which has led to unimpressive returns. In short, Canadians have yet to fully utilize the TFSA’s tax-free growth potential for their retirement income.
At age 55, a well-funded TFSA becomes increasingly valuable. Unlike withdrawals from the Registered Retirement Saving Plan (RRSP), TFSA distributions do not incur taxes and do not affect eligibility for government benefits for the Canada Pension Plan, Old Age Security or the Guaranteed Income Supplement.
It is striking that the TFSA balance for women in the age group 55-59 years is higher than that for men. This pattern is visible across most age groups, even though women earn on average 36% less. The gap suggests that different savings habits may outweigh income differences in building long-term wealth.
Canadians should prioritize maximizing TFSA contributions each year to enjoy tax-free returns for life. Here’s how you can also use the TFSA to create a steady stream of passive income.
Own blue-chip TSX dividend shares in the TFSA
TFSA investors should consider owning a portfolio of top dividend stocks to build a recurring passive income stream in 2026. One of those Canadian stocks is Brookfield Infrastructure Partners (TSX:BIP.UN), which offers you a 5.1% dividend yield. Over the past decade, BIP shares have returned almost 300% to shareholders, after adjusting for dividend reinvestments.
Brookfield owns and operates a portfolio of cash-generating assets in industries including utilities, transportation, data centers and midstream.
Brookfield Infrastructure Partners has delivered strong financial results over the past five years despite headwinds, and the company now believes it is at an inflection point that could deliver substantially higher growth rates.
The partnership generated 13% annual growth in absolute funds from operations and 10% growth in cash flow per unit over the past five years, while reducing its payout ratio from 78% to 67%.
These figures exceeded Canada’s midstream and utility sectors, which averaged cash flow growth of around 5% over the same period, although they remained below BIP’s long-term average of 14% annual growth.
Rising interest rates in recent years weighed on results, with the federal funds rate rising 500 basis points and the 10-year Treasury bond rising 400 basis points. Adjusting for these headwinds, BIP’s operating resources per unit would have grown 12% annually instead of 10%.
Interest rates are now stable or falling, and BIP recently issued a five-year bond at 3.7%, up from more than 200 basis points higher just two years ago.
BIP has committed $2.1 billion to new investments in 2025, including $700 million in organic growth projects and $1.4 billion for four new acquisitions targeting returns of 12% to 15%. It recycled $2.8 billion through the sale of eight assets, generating a 20% internal rate of return and a fourfold multiple on capital.
Management highlighted artificial intelligence infrastructure as a key growth opportunity, with plans to allocate $500 million annually to AI-related projects.
The company aims to have seven AI factories in five countries, with total capital deployment potentially reaching $200 billion over time.
Looking ahead, BIP expects to return to an annual growth rate of almost 14%, allowing dividend increases at the high end of the target range of 5% to 9% without increasing the payout ratio.
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