When you’re 40 and questioning whether or not your Tax-Free Financial savings Account (TFSA) is on monitor, the numbers could shock you.
Based on Statistics Canada information launched in 2025 (primarily based on the 2023 contribution 12 months), Canadians aged 40 to 44 held a mean TFSA stability of $20,670. Much more placing? The identical group had a mean unused contribution room of $62,618.
That’s not simply spare room. That’s untapped tax-free compounding energy.
Supply: Getty Photos
The $20,670 query: Is that sufficient?
On the floor, $20,670 could not look alarming. However context adjustments all the pieces.
If that common stability had been invested fully within the Canadian inventory market — say by the iShares S&P/TSX 60 Index ETF as a proxy — it will have grown greater than 33% on the time of writing, pushing the worth to roughly $27,615.
That’s significant development in a brief interval.
The Canadian market has delivered a compound annual return north of 20% over the previous two years — effectively above its 10-year common of about 14.5%. However right here’s the uncomfortable fact: markets don’t compound at 20% eternally. Betting on continued outperformance is dangerous.
Which raises the actual query:
If markets cool, will your contribution habits carry the load?
Why many 40-year-olds are behind
The common unused room of $62,618 tells a transparent story. Many Canadians aren’t maximizing probably the most highly effective wealth-building instruments obtainable.
The TFSA restrict for this 12 months is $7,000. That works out to about $583 per thirty days — manageable for those who automate contributions.
However falling behind will get costly rapidly.
When you contributed solely half your restrict over the previous 5 years, catching up in a single 12 months would require roughly $1,937 per thirty days. That’s a critical stretch for a lot of households, particularly with inflation squeezing money circulation.
The lesson? Consistency beats catch-up.
At 40, time continues to be in your aspect — however not as generously because it was at 30. The following 20 to 25 years are prime compounding years. Lacking them is dear.
Investing past contributions
Maxing out your TFSA is the first step. Step two is placing that capital to work intelligently.
One candidate for long-term traders is Restaurant Manufacturers Worldwide (TSX: QSR), the worldwide operator behind main quick-service restaurant chains like Burger King and Tim Hortons.
In its newest 2025 outcomes, the corporate reported:
- System-wide gross sales up 5.3% to US$46.8 billion
- Comparable gross sales development of two.4%
- Restaurant depend rising 2.9% to 33,041 areas
- Income up 12% to US$9.4 billion
- Adjusted earnings-per-share (EPS) climbing 10.5% to US$3.69
Worldwide operations had been significantly robust, with comparable gross sales up 6.1% within the fourth quarter.
At roughly $94 per share, the inventory trades about 8% beneath the analyst consensus goal (suggesting a reasonably valued inventory) and presents a dividend yield round 3.7%. For long-term TFSA traders searching for world development plus earnings, it’s an inexpensive candidate — particularly on market pullbacks. After all, diversification issues. A TFSA shouldn’t hinge on one inventory. However combining regular contributions with high quality companies can materially speed up long-term tax-free development.
Investor takeaway
The common Canadian TFSA at age 40 sits at $20,670 — however the extra revealing quantity is the $62,618 in unused room. That hole represents missed compounding potential.
Markets could not all the time ship 20% returns, however disciplined month-to-month contributions and considerate investing can nonetheless construct substantial wealth. At 40, you continue to have time — simply not time to waste.
The actual comparability isn’t in opposition to the nationwide common. It’s in opposition to the place you could possibly be in 20 years for those who begin maximizing at present.