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What the Average Canadian TFSA Looks Like at 50 – and 3 Stocks That Could Help You Catch Up

Motley Fool - 1 hour ago

By Puja Tayal at The Motley Fool Canada

Turning 50 rings an alarm on retirement savings. Questions like “Can my savings fund my retirement?” start giving you sleepless nights. The Statistics Canada data for the 2023 tax year showed that Canadians accelerated their Tax-Free Savings Account (TFSA) contributions as they approached the age group of 50–54.

What the average Canadian TFSA looks like at 50

The table below shows a 13% jump in average TFSA contributiosn between the age groups of 45–49 and 50–54. In 2023, the cumulative TFSA contribution room was $88,000, and Canadians’ TFSA balance made up for 34% of it.

Age Group (2023 tax Year)40–444549505455596065
Average Contribution$9,014$9,737$11,051$12,302$13,167
YoY Growth8%13%11%7%
Avg Fair Market Value (FMV)$20,670$24,150$30,190$37,600$45,109
YoY Growth17%25%25%20%
Cumulative Contribution (CC)$88,000$88,000$88,000$88,000$88,000
FMV/ CC23%27%34%43%51%

Even after accelerated contributions, a $30,190 TFSA balance at age 50 is not enough to retire at age 60. You should have at least $1 million in a TFSA to help you fill the gaps from taxable government retirement benefits, like Canada Pension Plan (CPP) and Old Age Security (OAS) pension.

3 stocks that could help you catch up on your TFSA Balance

You still have 10 years to catch up on the investments. At age 50, your priority should be to invest in long-term growth stocks that can give you 10 times growth in 10 to 12 years. A $10,000 investment in four to five such stocks can help you increase your chances to grow your TFSA balance to half a million. If even one investment succeeds in delivering 10 times growth, it will make up for the slow growth of others.

Long-term growth stocks to accelerate a TFSA balance

Shopify stock

Shopify (TSX:SHOP) is a seasonal stock that can help you generate an average annual return of 30–50% in the next 10 years. The company has achieved consistent revenue and free cash flow growth. From here onwards, the flywheel business model will help accelerate growth and profit margins.

March to June are seasonal troughs, and November and February are seasonal peaks. You can make the most of this pattern by selling 50–75% of your holding in the peaks and using those profits to buy more stocks in the dips.

For instance, you invested $10,000 in Shopify in April 2024 at $96 per share and bought 104 shares. You sold 75 shares on January 31, 2025, at $169 per share, and got $12,675. Here, you book a profit while 29 shares remain invested for the long term.

You can use the $12,675 to buy 109 shares of Shopify in April 2025 at $116 per share. Now you have 138 shares (109 + 29 shares), 75% of which comes to 103 shares.

PeriodShare Price (Entry and Exit)Number of Shares BoughtNumber of Shares SoldBalance Shares
Apr 2024–Jan 2025$96 and $1691047529
Dollar Value$10,000$12,675$4,901
Apr 2025–Jan 2026$116 and $18810910335
Dollar Value$12,675$19,364$6,580
Apr-26$179108143
Dollar Value$19,364$25,597

This frequent profit booking can grow your $10,000 investment to $25,597, with 40 new shares purchased only from profits. Without this process, the 104 shares would now be worth $18,616, a difference of almost $7,000. This can help you accelerate your TFSA balance, and buying and selling within a TFSA is tax-free. Just don’t withdraw the money.

A hyper-growth stock for a TFSA

Micron Technology (NASDAQ:MU) stock is at the cusp of cyclical growth as artificial intelligence (AI) data centres have created a memory chip supply shortage. This shortage will take at least two years to ease as it builds new capacity. During this time, Micron can command a higher price for its mobile and computer chips and enjoy windfall gains. Once the high-margin data centre memory chip capacity comes online, it will make up for a significant portion of its revenue. This could see another growth cycle of 100–200%.

Kinross Gold can act as a hedge against inflation and balance your TFSA portfolio from market downturns.

The post What the Average Canadian TFSA Looks Like at 50 – and 3 Stocks That Could Help You Catch Up appeared first on The Motley Fool Canada.

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The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Micron Technology. The Motley Fool has a disclosure policyFool contributor Puja Tayal has no position in any of the stocks mentioned.

2026

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