Most Canadians of their mid-50s aren’t saving practically sufficient for retirement of their Tax-Free Financial savings Accounts (TFSAs). Based on an in depth report from Blueprint Monetary, the common TFSA steadiness for Canadians aged 55 to 59 is $33,200. That’s properly under what monetary consultants suggest for folks approaching the ultimate stretch earlier than retirement.
For context, these aged 50 to 54 maintain a median of $26,400, whereas these aged 60 to 64 maintain a median of $40,000.
The modest balances stem from two important issues. First, folks contribute inconsistently. Second, they park their cash in low-interest financial savings merchandise relatively than investing in inflation-beating asset courses.
A number of Canadians deal with the TFSA as a “financial savings account” relatively than an “funding account,” leading to subpar returns.
Why your TFSA issues extra at 55
At 55, a well-funded TFSA turns into more and more worthwhile. In contrast to RRSP (Registered Retirement Financial savings Plan) withdrawals, TFSA distributions don’t set off taxes or have an effect on authorities profit eligibility for Canada Pension Plan, Previous Age Safety, or Assured Earnings Complement.
This flexibility makes the TFSA one of the crucial highly effective retirement planning instruments out there. You possibly can withdraw cash if you want it with out worrying about tax implications or shedding authorities advantages. That’s an enormous benefit over conventional retirement accounts.
Constructing actual wealth with progress shares
Canadians ought to contemplate proudly owning high quality progress shares contained in the TFSA to construct long-term wealth.
Alternate Earnings Company (TSX:EIF) gives an ideal instance of how progress shares can remodel your retirement financial savings. The corporate operates important companies throughout aviation and manufacturing, positioning it on the intersection of a number of highly effective developments.
Within the final 15 years, EIF inventory has returned greater than 1,200% to shareholders after adjusting for dividend reinvestments.
Within the third quarter (Q3) of 2025, it reported income of $960 million with an adjusted EBITDA (earnings earlier than curiosity, tax, depreciation, and amortization) of $231 million.
The corporate’s earnings per share rose to $1.32, up from $1.18 within the prior 12 months. That represents 17% progress even after issuing new shares for acquisitions and debt conversions.
Alternate Earnings sits on the forefront of a number of megatrends.
- Will increase in protection spending create alternatives for surveillance companies.
- Important mineral improvement drives demand for fly-in, fly-out operations.
- Synthetic intelligence and knowledge centres require transmission infrastructure, benefiting the corporate’s composite matting and electrical operations.
The corporate offered 2026 steerage of $825 million to $875 million in adjusted EBITDA. That’s primarily based purely on present operations with out factoring in new acquisitions, important contracts, or main progress investments.
Administration elevated the annual dividend from $2.64 to $2.76 per share, a 5% enhance. The corporate eradicated all convertible debentures from its capital construction. Its combination leverage ratio is at a historic low, close to 2.89 occasions, properly inside goal ranges.
With roughly $1.2 billion in out there capital, Alternate Earnings can execute on progress alternatives while not having to entry fairness markets.
Why progress shares belong in your TFSA
Holding progress shares like Alternate Earnings inside a TFSA means all dividends and capital features develop fully tax-free. Once you ultimately withdraw the cash in retirement, you pay zero taxes on a long time of progress.
Examine that to holding money or Assured Funding Certificates incomes 3% yearly. A $33,200 TFSA steadiness incomes 3% generates about $996 per 12 months. After 10 years with no further contributions, you’d have roughly $44,600.
Now contemplate that very same $33,200 invested in high quality progress shares averaging 10% annual returns (very achievable with firms like Alternate Earnings). After 10 years, that grows to roughly $86,200. That’s practically double the money state of affairs.
The distinction turns into much more dramatic over 15 or 20 years. Compound progress works powerfully in your favor if you personal companies producing actual earnings progress relatively than sitting in money.
The bottom line is choosing firms with sustainable enterprise fashions, robust administration groups, and publicity to long-term developments. Alternate Earnings checks all these bins via its important companies, authorities contracts, and its place in Northern improvement.