A Tax-Free Financial savings Account (TFSA) is likely one of the most liquid registered financial savings accounts. It means that you can withdraw your steadiness partially or utterly, tax-free. Canadians have been utilizing this flexibility and treating TFSA as a standard financial savings account for his or her instant money wants.
Whenever you attain 50, retirement financial savings take precedence over different issues. But the TFSA honest market worth of Canadians within the 50-54 age group was solely $30,190 within the 2023 tax yr, in accordance with Canada Income Company’s (CRA) newest TFSA statistics. That’s 34% of the cumulative TFSA contributions of $88,000 in 2023.
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How a lot Canadians usually have in a TFSA by age 50
The $30,190 TFSA worth was for 2023. But when we have a look at 10 years of information, Canadians usually have a TFSA steadiness of 35% of cumulative contributions by age 50. A significant cause for the decrease TFSA steadiness might be constant withdrawals.
| TFSA Statistics for Age 50-54 | 2013 | 2020 | 2021 | 2022 | 2023 |
| Avg Truthful Market Worth (FMV) | $11,043.88 | $24,422 | $28,611 | $26,479 | $30,190 |
| Common Contribution | $6,240.22 | $9,827 | $11,668 | $10,331 | $11,051 |
| Common Withdrawal | $5,237.90 | $8,669 | $9,986 | $10,219 | $11,413 |
| Cumulative Contribution (CC) | $25,500 | $69,500 | $75,500 | $81,500 | $88,000 |
| TFSA Stability/ CC | 43% | 35% | 38% | 32% | 34% |
If we have a look at the TFSA withdrawals, they have been decrease than the contributions till 2021. Nevertheless, withdrawals elevated or have been in step with contributions in 2022 and 2023. The TFSA contributions spiked in 2020 and 2021 as individuals had a number of issues to spend on throughout the lockdown, they usually obtained the Canada Emergency Response Profit (CERB). The contribution fell, and withdrawal elevated in 2022 when the lockdown ended, and consumption elevated. This was the yr of revenge journey, excessive inflation, and tech inventory meltdown.
Canadians have been withdrawing their financial savings from their TFSA to satisfy short-term wants.
Why is that so?
TD Financial institution surveyed Canadians between October 24 and 27, 2025, and located that 39% of Canadians who’ve a TFSA usually are not investing the cash in it. One core cause for it’s to have funds available. That explains the decrease steadiness and constant withdrawals.
The TFSA financial savings development of Canadians who turned 50 in 2023 exhibits they elevated their contributions with time. And regardless of the withdrawals, their TFSA steadiness doubled in 5 years.
| TFSA Statistics for individuals who turned 50 in 2023 | 2013 | 2018 | 2020 | 2023 |
| Age | 40 | 45 | 47 | 50 |
| Avg FMV | $7,566.33 | $14,853 | $19,821 | $30,190 |
| Avg Contribution | $5,169.03 | $7,403 | $9,146 | $11,051 |
| Avg Withdrawal | $4,743.09 | $7,248 | $8,140 | $11,413 |
Tips on how to benefit from your TFSA
Even after constant withdrawals, the typical TFSA steadiness doubled in 5 years as a result of the account permits your cash to develop tax-free. It implies that if you happen to promote a inventory for capital achieve and reinvest that cash to purchase a brand new inventory, you don’t pay any tax. Had it been another account, you needed to pay tax. This tax-free compounding will help you construct a million-dollar portfolio.
You don’t want too many shares to put money into a TFSA. Solely a handful of shares that you’re assured about will help you construct wealth. The trick is to remain invested and maintain investing for the long run.
Constellation Software program (TSX: CSU) is an effective TFSA development inventory to purchase. It has generated 20% compounded annual development fee in 10 years. Its share is presently buying and selling nearer to its three-year low as the substitute intelligence (AI) growth and administration change sparked worry amongst buyers.
The uncertainty round AI’s influence on conventional software program has affected each software program firm. Many buyers view this as a menace and are avoiding software program. Nevertheless, Constellation continues to accumulate vertical-specific software program (VSS) firms that function mission-critical purposes.
Constellation is focused on money flows. On the one hand, VSS enjoys common money circulate from upkeep charges. However, AI is but to generate returns that may justify its enormous funding and vitality wants. Despite the fact that AI can be disruptive, it can have vertical-specific variations. As soon as AI proves to be return on funding generator, Constellation may tweak its acquisitions in vertical-specific AI firms.
Now is an effective time to purchase Constellation at its dip and lock in future development rally.