Source: Getty Images <\/p>\n
Written by Puja Tayal<\/a> at The Motley Fool Canada<\/p>\n The Tax-Free Savings Account (TFSA) is a good place for Canadians to build retirement savings. According to a BMO Financial Group survey<\/a>, among all age groups, boomers aged between 61 and 79 have the highest average TFSA value of over $72,000 in 2024. However, is a $72,000 TFSA balance enough to retire, especially when the cumulative contribution room was $95,000 in 2024?<\/p>\n The account\u2019s tax-free withdrawals make it a crucial instrument for retirement. Most retirement accounts and pensions are taxable, from the Canada Pension Plan (CPP) to the Registered Retirement Savings Plan (RRSP<\/a>). And their withdrawals can affect your Old Age Security (OAS), which is available to people under a certain income threshold. However, TFSA withdrawals do not affect OAS<\/a>, making it your first preference for tax-free retirement income.<\/p>\n Considering the maximum CPP and OAS one can get at age 65, you can earn the equivalent of $25,928 in 2025. The income with the lowest tax bracket is $57,375. The absolute numbers won\u2019t help if your retirement is 10 years later. However, CPP and OAS can fund 34\u201345% of the income in the low tax bracket. You need to arrange for the remaining 60\u201370% today so that it grows with inflation.<\/p>\n Standing today, your TFSA, RRSP, and other income options should give between $31,500 and $37,700 to cover the 70% deficit in annual income of $57,000.<\/p>\n On average, you need your retirement investments to pay you $35,000 annually at today\u2019s inflation. This $35,000 should grow annually by 3\u20135% to adjust for inflation. Considering most Canadian dividend stocks provide a 6% yield, a $584,000 portfolio can give $35,000 in annual dividend income.<\/p>\n This $584,000 can be divided equally between a TFSA, RRSP, and a private pension. It means you need at least $195,000 in a TFSA balance that grows with inflation to retire.<\/p>\n The highest average TFSA balance of $72,000 is only 37% of what is needed to retire. You need stocks that can bridge this gap and also beat inflation by compounding returns.<\/p>\n The iShares S&P\/TSX Capped Information Tech Idx ETF (TSX:XIT<\/a>) has a 10-year compounded annual growth rate (CAGR) of slightly over 20%. So if you invested $10,000 10 years ago, it is now worth $63,770. To adjust for a 5% inflation rate, the $10,000 amount should have grown to $16,300. Yet, the ETF value grew almost fourfold, helping you bridge the gap and come closer to the TFSA target.<\/p>\n The XIT tech ETF can continue to deliver strong double-digit returns as it will benefit from the artificial intelligence (AI) revolution, e-commerce, and other tech adoptions. <\/p>\n Like the XIT ETF, there are resilient growth stocks<\/a>, like Shopify, and seasonal stocks like Air Canada that can help you generate 25\u201330% returns when bought at the dip in March and sold at the seasonal peak of February and July, respectively.<\/p>\n Another way to reach the inflation-adjusted $195,000 TFSA portfolio is dividend growth stocks, like Canadian Natural Resources (TSX:CNQ<\/a>), and reinvesting their dividends in growth stocks. This oil and gas supplier has a cost advantage and incorporates the dividend amount in the cost. Its 25-year dividend growth history with a CAGR of 21% assures you that it can continue paying dividends for years to come.<\/p>\n A $10,000 invested in January 2016 would have bought you 667 shares, which are now worth $29,788. The dividend income from these shares has grown from $313 in 2016 to $1,567 in 2025. The 10-year cumulative dividend is over $8,600. If you reinvest this dividend, this money will also earn a return and help you achieve your TFSA portfolio value goal.<\/p>\n Saving your working income is not enough. You have to put your money to work. When both you and your money work, there will come a time when you can live off the money that is working for you.<\/p>\n The post Here\u2019s How Much Canadians Need in Their TFSA To Retire\u00a0<\/a> appeared first on The Motley Fool Canada<\/a>.<\/p>\n Before you buy stock in iShares S&P\/TSX Capped Information Technology Index ETF, consider this:<\/p>\n The Motley Fool Stock Advisor Canada analyst team identified what they believe are the 15 best stocks for investors to buy now\u2026 and iShares S&P\/TSX Capped Information Technology Index ETF wasn\u2019t one of them. The 15 stocks that made the cut could potentially produce monster returns in the coming years.<\/p>\n Consider MercadoLibre, which we first recommended on January 8, 2014 \u2026 if you invested $1,000 in the \u201ceBay of Latin America\u201d at the time of our recommendation, you\u2019d have $21,105.89!*<\/p>\n Now, it\u2019s worth noting Stock Advisor Canada\u2019s total average return is 95%* \u2013 a market-crushing outperformance compared to 72%* for the S&P\/TSX Composite Index. Don\u2019t miss out on our top 15 list, available when you join Stock Advisor Canada.<\/p>\n See the 15 Stocks<\/a><\/p>\n * Returns as of November 17th, 2025<\/p>\n More reading<\/p>\n The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Air Canada and Canadian Natural Resources. The Motley Fool has a disclosure policy<\/a>. Fool contributor\u00a0Puja Tayal<\/a>\u00a0has no position in any of the stocks mentioned.<\/p>\n 2025<\/p>\n","protected":false},"excerpt":{"rendered":"Source: Getty Images Written by Puja Tayal at The Motley Fool Canada The Tax-Free Savings Account (TFSA) is…\n","protected":false},"author":2,"featured_media":352580,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[45,49,48,5437,85385,3713,55784,133,3714,131,132,1705,12985,19417],"class_list":["post-352579","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-ca","tag-canada","tag-canada-pension-plan","tag-canadian-dividend-stocks","tag-cpp","tag-dividend-income","tag-finance","tag-oas","tag-personal-finance","tag-personalfinance","tag-retirement","tag-retirement-savings","tag-tax-free-savings-account"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/352579","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=352579"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/352579\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/352580"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=352579"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=352579"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=352579"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}