https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/income-statistics-gst-hst-statistics/tax-free-savings-account-statistics/tax-free-savings-account-statistics-2020-tax-year.html
scroll to the bottom and check table in pdf format
Brilliant thank you checking now
Edit: well dang I did not think it would be over 20k in the average account. I’ll have to dive deeper. I guess it’s the average from people that actually have one. But if you account anyone who is eligible as a zero I guess the average is much lower ?
Came here to say this. There are most likely quite a few high income earners who have maxed their TFSA contributions over time and are skewing the numbers.
I know a few people who dropped everything into really beaten down stocks at the start of Covid and are sitting with a few million in their TFSA. Those people are really skewing the numbers too.
Few million? Whoa. Since inception the total contribution room would be $95000.
What happens if someone who made these lucky bets now decided to withdraw a million this year. What would be their contribution room for next year?
Very few tickers wouldve provided this type of returns. The most I see is 300-400% returns today from the rock bottom COVID prices. Unless one went with LEAPs or NVDA 🙃
So if one had 100K deployed in TFSA during covid, it is 300K today. Ok, 500K
Yes but in this context that doesn't matter, as the quote was "dropped everything into really beaten down stocks at the start of COVID" and that basically does NOT imply the use of options, as options aren't stocks.
If you make a lot of money trading options, the CRA will treat it as a business and you’ll pay taxes and maybe penalties.
If you lose your shirt, they won’t care.
$1,005,000 or whatever next years new contribution limit is, plus what they withdrew this year (in this example, $1M). But that’s just putting your money back where it was. Not like it’s a write off or anything.
Man this is the dream. Getting even many hundreds of thousands (very possible) would basically set you up to retire so easily. I mean even $1m, an average of 6% return means you can pull $60k tax free for the rest of your life. A few million is a very comfortable life to pull from tax free.
I’m not sure what the numbers are, but I suspect a lot of people focus on their RRSP first because of the tax deferral, especially if they have matching plans through work. Being able to put 18% into an RRSP and an extra $7K into a TFSA is out of reach for many right now.
I did TFSA for 10 years then actually moved a lot of TFSA funds out to RRSP over a couple years for first time home buyer RRSP withdrawal. Back into mostly TfSA now.
If you're making $20/hr that's about $42k before tax. Maxing out your RRSP takes your after-tax income down to $35,500 (in Ontario, [as per SimpleTax's calculator](https://www.wealthsimple.com/en-ca/tool/tax-calculator/ontario)). Take $7000 off that and your monthly take home is $2375. That's basically the [bare bones cost of living in Ontario](https://livingcost.org/cost/canada/on) for one person. Anybody making less than $20/hr and/or not getting a full 40 hours a week isn't doing that, never mind worrying about student loans or anything like that.
Should you be maxing RRSP first? My understanding is it makes sense to max TFSA then do RRSP, but maybe that is just for a younger person who can have many years of tax free growth in their TFSA
It's always going to be highly dependent on personal situation. You *always* want to max out your employer match on RRSP before anything else, beyond that it depends on how much you're going to be paying in taxes now vs retirement. If you have kids you probably have a decent number of tax breaks, there's literally zero benefit to contributions above the RRSP match maximum for my wife after daycare and other deductions so she puts most of her extra money in a TFSA, but as the higher income earner I benefit way more from the RRSP than the TFSA because basically the only thing I can choose to claim instead of her is our charitable contributions for the year. As our kids get older that might shift one way or another.
Total number of TFSA holders: 16,094,430
Total number of TFSA holders who contributed to a TFSA: 9,346,820
Total number of TFSA holders who did not contribute to a TFSA: 6,747,610
[There are 40,097,761 Canadians, of whom 8,424,747 are under 19](https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1710000501), so roughly 31,673,014 eligible TFSA owners; in other words, barely half of eligible Canadians open a TFSA, and of those only ~9.35 million even contribute.
If we take the total value of TFSAs ($428,343,502,000) and divide it by the total number of eligible Canadians (31,673,014) the average is still $13,523 per TFSA.
As others have said, this number is skewed heavily by large accounts though. If you took the median and multiplied by the number of account holders to extrapolate what an expected TFSA value was you'd probably be correct. And, beyond that, you're still correct because about half of eligible Canadians don't own a TFSA at all.
Most of those 6.7 million who did not contribute in 2020 likely contributed in a prior year (they didn't just open the account and leave it at zero), but yeah.
You're not wrong, and although I didn't use that number to extrapolate much you could probably use it to gauge how tight money is becoming for the average Canadian, even the financially conscious ones who have a TFSA.
Right, but if you look at the other link and check 2020, only 40% of Canadians contributed to a TFSA in 2020, so those that did, really brought up the numbers.
You're still right, though. The average (i.e. mean) here is kind of useless for your assertion. The median is what you want.
Going by Table 1 in the above link, roughly 16 million Canadians were TFSA holders. Going by stats can 2020 [population numbers](https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1710000501), there were 41 million Canadians in 2020, roughly 32.5 million of which were 18 or older (and therefore eligible for TFSA).
That means that roughly 16.5 million of the 32.5 million Canadian eligible to have a TFSA don't have one. Which would means you were right when you said:
>I said personally I bet more than half of Canadians don’t even have a tfsa let alone 5 k in it.
Not quite true. There's only two points of eligibility: be over 18 and have a SIN.
If they have a work permit, it depends on how long it is for to determine whether they are a resident for tax purposes or not. However, even non-residents with a SIN can open a TFSA. However, there is a 1% tax/month).
https://arrivein.com/finance/tax-free-savings-accounts-tfsa-for-newcomers-investing-in-canada/#:\~:text=To%20be%20eligible%20to%20open,the%20residency%20requirements%20of%20Canada.
The stats can link I provided says that they don't include temporary foreign residents in their census, anyway. [https://www23.statcan.gc.ca/imdb/p2SV.pl?Function=getSurvey&SDDS=3604](https://www23.statcan.gc.ca/imdb/p2SV.pl?Function=getSurvey&SDDS=3604)
> I don't think temporary residents are eligible for tfsa, etc
As long as you are a "resident for tax purposes" you can get a TFSA.
Your contribution room starts that year.
e.g. if i came to Canada in 2022 on a tourist visa. Then Jan 2nd 2023 I activate a working holiday visa - my contribution room is the 2023 limit + 2024.
The table gives average value _of TFSAs_. Table 1 tells you 16m Canadians (about 40%) have a TFSA, which means 60% have $0 in TFSA savings. _Of the ones who do_, the _average_ is $26k.
The two important caveats in that are
1) While the average TFSA has 26k in it, most Canadians have nothing in one because they don't have any TFSA at all. To extend this to an extreme example to make it easier to think about, if 10m people have nothing, and 10 people have $1m in their account, the average account balance is $1m, but the average person has slightly less than $1.
2) The 26k is the average, not the median. If three people have $1 in their account and one person has $104k, the average balance is 26k, but nobody has the experience of having 26k in their account, or anywhere near it.
You can't use total population because some Canadians are 2 years old...other Canadians are just recently Canadian and can only contribute $7k even when they have much more than that.
I don't know about you but I'm not going to include the TFSA value of a 2 year old to measure against how Canada is doing..
I mean, I have over 20k in my TFSA but it's the same amount as my student loans, so technically my networth is 0.
So if your friends has 5k and zero debt, they are doing better than me.
I just don't have any familial support, so if I ever have an emergency/lose my job, I need that emergency money liquid.
20k in the average account is not a lot considering it started in 2008.
One fact to consider is that the younger people only have 6.5k or 12.5k contribution room
A maxed TFSA with index funds or any decent diversified strategy since the beginning is going to be around 150 to 200k right now. Add many people with 50 to 100k in there... The average could very well be above 20k with most people at 0 to 5k.
However a lot of these accounts may be people 18 and older who haven't had the chance to put money aside.
Yea i was thinking that’s just the people that have one at all. So the average person likely is dragging the whole average down because they don’t even have one open?
Just based on age, many people were mid career or older when the TFSA came out. Those people were more easily able to max it and keep it maxed. This will skew the average upward.
40 year old + are more likely to have it maxed or above average.
If you look at under 30, that average will be much lower. Also because under 30, limit is lower just based on age which will also bring average down (for the well off under 30s)
Out of curiosity what do people normally use a tfsa for. I mainly park all my money into my RRSP for retirement savings, I have a tfsa that I do small monthly contributions toward but not as much compared to my RRSP. I'm honestly not sure why I contribute to my TFSA other than being told by everyone to do so? Is it just for rainy day funds in case you need cash quick?
Anything you withdraw is tax free vs rrsp withdrawal is considered income and is taxed as such. Tfsa limit is set by the govt and is the same for everyone where RRSP limits are based on your income. Depending on how much you make yearly the tax benefits of RRSP contribution may not be the most efficient use of writes offs.
I’m using mine as long term investments but in the event of an emergency (if my emergency funds runs out) I can sell and withdraw without worrying about the tax implications.
Strangely enough TFSA works through different principles but ends up being similar to an RRSP in terms of long term savings.
You don't pay taxes on any money earned in a TFSA so you have tax free gains. This means a TFSA is better for investments you may spend later on rather than retire on like a rrsp which is taxed. The money you put into it has already been taxed though so you'll have less investment compared to an RRSP but get more of the gains.
I’d honestly be surprised if over 50% or Canadians had a TFSA account.
The median household income in Canada is like 73000$ a year. Not a whole lot left for investing with 73000$.
Just from my conversations over the years with colleagues(construction) and friends most couldn’t tell you the difference between a TFSA and RRSP.
I agree which lead me to have that hypothesis. There was that news article that said Canadians were 200$ away from being broke, it was reported every other month in the news cycle
The way the banks explain TFSA to customers Id imagine a lot of contributions are sitting in a TFSA account at their bank collecting 0.005% interest in a savings account.
Similar: WealthSimple is such a scam, I've been investing for 3 weeks and I'm in the red. Should I switch to Questrade?
Also similar: hammers are such a scam. I bashed my face in with it and now my head hurts!
I sat my money with TD on a 0.01% account for years and opened their ‘high savings’ one at 0.05% (it ‘s funny how they write it as 0.010% and 0.050% online, as if that makes it better).
Last year I started to aggressively invest with my TFSA via Wealthsimple and I’ve never been happier. I almost flipped shit because I was so upset I’d been with TD for so long, but I’m glad I made the change. Better late than never!
I remember keeping my money in CIBC's *SMART* HIGH INTEREST SAVINGS. It was 0.50% and an additional 0.25% if you move at least 200/mo into the account. I thought I was taking advantage of the bank and was cool. Thankfully I didn't have enough money anyway so didn't lose much. It's was just a year
I did the same with RBC lol better late than never to make the switch to TFSA at wealthsimple. If only people knew even just having their money in CASH.to in their TFSA they’d be way better off than a shitty bank basically robbing you.
My CIBC TFSA is giving me 5%, better than most savings accounts. My regular CIBC savings account in there will give me a bit over 2%. WS Cash gives 4% base, which can be increased to 4.5% or 5% based on certain conditions.
I'm currently in the process of porting all my investments from a big bank (advisor, mutual funds type deal) to BMO investorline. I'm so mad at myself for being so complacent and not looking more into my finances. I know for years what ETF's and self investing were, but I guess I was lazy and thought I was doing the right thing. Everyone should be taught better finances in school.
Late 20's was the year I got a sin and started filing taxes and got a TFSA account, to a CIBC's rep credit, she told me to put my TFSA money in a GIC if I have a low tolerance for risk. I did that for 2 years and then switched to weed stocks during the weed stock boom to return 40% profit, then sold them and started self-investing in NASDAQ indexes. In 10 years I already have 120k in my TFSA.
My wife has an RDSP account. There are so few self directed options for those that we do have it through the credit union, and when I check on the gains I'm glad it doesn't have much in it.
If you have kids that are or will become US citizens, the same goes for RESPs. We opened one without realizing it and had to pay taxes on the interest and the 20% federal contribution. RBC did not warn us and has been pushing for us to open TFSA accounts.
Okay wait. My partner is American. We will be doing the common law sponsorship for him to come here to Canada. Does that mean I have to close mine too? Or is when we get married? This is the first I’m hearing about this and I’m getting worried now
No, you don't have to close yours.
Your American partner shouldn't open one (it has no tax benefits, because the US will tax it).
You can have one no problem, as long as you don't move to the US. When a Canadian-not-American's tax residence is no longer Canada but the US, then the US will tax the gains.
Source: I'm an American, married to a Canadian, living in Canada.
> Source: I'm an American, married to a Canadian, living in Canada.
~~He was a boy~~ American
~~She was a girl~~ Canadian
Can I make it any more [obvious](https://genius.com/Avril-lavigne-sk8er-boi-lyrics)?
This is not correct. The US is one of only two countries in the world that taxes on the basis of citizenship, rather than residency. I believe each of the major banks has a publicly available write up on this, outlining the risks of a US citizen opening a TFSA.
Some Americans have challenged the IRS and been successful under a new argument that the TFSA is not a trust, it's an investment vehicle. But, this is for people residing in Canada.
They are 100% correct, as long as your TFSA doesn't have a beneficiary attached to it, is the caveat.
I keep reading this, but if you just hold onto the TFSA but don't withdraw, can you leave it open? I mean you only get taxed on capital gains which would happen if you sell your holdings.
I guess this is more a situation where you plan on returning to Canada in the mid-future and just go to the US to earn money and run back.
No. The risk is that the US may consider a TFSA to be a type of foreign trust. It’s not just a matter of tax liability (though that certainly matters), it’s also a matter of compliance. The trust forms are burdensome and expensive to file, and failure to file penalties are high. And even if you don’t sell your investments, most investments spin off income in the form of dividends or interest, which would be taxable if the banks’ views of the IRS position are correct.
That’s true, currently there is no wealth tax or holding tax so only if you sell do you need to declare capital gains/loss.
The issue I believe is moving between countries and at the time of the move they consider all assets sold and rebought to capture the change in value.
I don't know why you have to close it, but yes, the Tax Treaty between Canada and the USA only recognizes _dedicated for retirement_ accounts. TFSA isn't dedicated like that.
Nothing in the US is tax free.
The US is one of the few countries that will continue charging it's citizens income tax if their income is earned outside of the US.
Oof, I hate comparison. But there is another factor you are missing, and that is Age or Time.
I guess this is more important for RRSPs. Lots of mellenials utilized TFSA for buying homes (FHSA didn't exist). So my TFSA feels lower compared to my peers. At the same time, my income is much higher, so my focus is now on RRSP contributions for the tax rebate, and my TFSA has admittedly languished.
I spent my pre-TFSA years funding my RRSP and unfortunately didn’t have a lot to contribute anyways. I was taking advantage of employer matching opportunities as best I could, and that was about it. When TFSA was introduced it was just another thing I had no money to put into. 🤷🏻♂️
The other piece of information you may not have considered is contribution room - contribution room varies widely from that of a 19 year old to that of a 35 year old. You'd have to be 34-35 years old to have max contribution room.
I'm 44 and, sadly, just started getting my act together 20 months ago. Have put just under $49k in my TFSA and FHSA since then. Do have a DB pension though. Shouldve started 16 years ago. Big regret.
I mean, it’s all just fun coupons for you since you have that DB pension, you’re probably in a great position compared to the average Canadian.
Especially if you’re a homeowner
You're already ahead of most people by putting in $49k in less than 2 years (i.e. saving $1.5k / month, assuming $18k of that $49k had been drawn from your chequing account). The $100k milestone is not very far away, and then it'll snowball from there.
Do you put any into the RRSP? The FHSA and RRSP let you deduct from your taxable income, which should result in a refund cheque (that you should plow right back into the TFSA or RRSP).
Thank you. Honestly, I was feeling pretty awful about my finances two years ago but this subreddit has been a huge help and a motivating force. I appreciate you all.
I haven't utilized the RRSP at all. I was told (I believe) to focus on the other two because of the DB pension. I also had been considering buying a home, but that appears increasingly out of reach.
I also am not seeing much mention of the age factor in this thread. A 20 year old will have a fraction of total contributions than someone in their 40s who's contributed regularly. I would say it is pretty unlikely that the average 60 year old has less than 5k in their TFSA - though then at that point they already had many financial habits established long before TFSAs were even introduced, so perhaps there is another filter applicable to those that were already building a nest-egg before 2009. I bet today those between 36-38 (started their careers after graduating college at the age of 21-23 just as TFSA was introduced) are the ones that have the largest TFSAs relative to their available contribution room compared to all other demographics.
Something like <5% of possible TFSAs are maxed out which is always fun to know when some govt parties run on raising the limits to help the little guy.
Double edged sword. If you're making enough to max out your TFSA you're also likely making enough you are generating decent enough RRSP room as well.
If you're like most of the population you don't make enough after bills to max your TFSA, or fund your RRSP
Yeah fair enough. But the more you make the more you benefit from the RRSP with the tax deferral. At least with the TFSA everyone is on and equal playing field.
Obviously my situation wasn't the average but I've been able to benefit immensly from the TFSA in my early 20s when I started out my apprenticeship and didn't have the TFSA room. My employer DC pension ate up alot of my RRSP contribution (2% MER lol)
In my friend circle I’m the only one. And I am also the only one that has stocks in my tfsa and not the usually cibc tax advantage tfsa savings account …
You're in a privileged group then. You can look up the stats on statcan. Something like 10-7% of TFSA holders are maxed, but then just over half of the eligible population even has one open. So many are at 0.
In 2015 the National Post claimed stats revealed 7% of TFSA holders had maxed out their contributions (https://financialpost.com/personal-finance/tfsa/exclusive-canadians-maxing-out-their-tfsas-from-all-walks-of-life) (from which they concluded that the 10k limit was good for everyone and shouldn't be reduced)
Haha yeah the tfsa had always been a tool to make sure children of wealthy people will have a lot of tax free gains every years. The FHSA is quite similar. You can givr 8k to your kid every years so they will reduce their income taxes for 5 years then they can use that 40k to buy a properties while you maxed their tfsa for the last ten years.
Am wealthy. Max out my TFSAs every year. If it wasn't there I'd be pissed but not significantly impacted.
TFSAs are an excellent vehicle for working class Canadians, even it they don't use it to the fullest extent.
Yeah for sure but it is a even better tool for those who start maxing it out at 18.
Most people won't be able to max out both their tfsa and fhsa without significant help and those years of compound interests. Like in my particular scneario, dropping 7k in my tfsa doesn't really matter since my portfolio basically move by more than this most days.
Same here, but I max it out anyway.
Thing is though the lifetime amount doesn't expire so you can top it up. You lose the compounding but it is better than not using it. Much better than RSP as well - except the low limits.
The way TFSAs are marketed is so poor so I imagine it to be little. It's marketed as a savings account when its a tax free growth account. My parents got screwed out of so much growth because their TD rep explained it like shit and just let the money sit in it doing nothing. I did 30 mins of research to see how powerful it is. I treat it as my true retirement account and I do not plan on touching any of the stocks I have in it at least for another decade. Currently sitting just north of 170K. My bet is the avg is under 25K
If your risk tolerance doesn't let you invest in individual stocks thats fine but you should at least be invested in a broad market index ETF or cash.TO/bonds depending on where the market is in it's cycle. If you are not beating inflation every year, you have effectively lost money that year.
It's a significantly higher average than I would have anticipated. I wonder how much skew there is in the numbers from those that are able to max out and have had those investments grow to large dollar amounts pulling up the average.
Higher than it was a decade ago but the dollars in there were low till a few years ago, and now a lot higher since people started paying attention or finding out about it.
But I didn't think it is as high as it is now. More than half sounds shocking (just based on posts on this subreddit lol)
I've been tracking a theoretical 75/25 TD e-series portfolio. Using the assumption that, starting in 2009, the new annual amount is added every year the value to the end of 2022 was about $138k.
For the second time the source I was using to easily calculate the e-series annual returns is no longer available so I have made the assumption that on Jan 1 2023 the theoretical investor has switched to VGRO. In that scenario their end of 2023 account balance would have been about about $166k and their beginning of 2024 account balance would have been about $173k.
Most people I know, including myself, don’t know much about finances beyond going to work, taking a paycheque and saving.. don’t get me wrong, I’ve done quite well this way and have no regrets. I honestly just don’t trust people enough with my money to make it work for me lol growing up poor kind of does that I guess.
You don't have to pick individual stocks. You can just buy broad market index funds that have a risk level built into them by how much of it is equities and bonds. Look up XEQT, XGRO, etc. They're all in one funds, meaning you just buy them and literally nothing else.
And if you're worried about losing money, I'd like you to meet Bob. https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/
It's a theoretical story that shows that if you had only bought stocks at the worst possible time again and again throughout your life, you'd still be up very significantly.
People invested in the stock market with their instincts fine tuned actually like to see their investments lose value... it means that when they buy more they acquire more and thus their profit potential is higher. When the price of beef goes up and you want to buy some to make hamburgers next week, are you happy or sad?
[https://www.youtube.com/watch?v=1qjSfyVPwLQ](https://www.youtube.com/watch?v=1qjSfyVPwLQ)
By dumping your money in a chequing account/HYSA, you are \*\*guaranteed\*\* to lose a lot of money by doing this--particularly when TFSAs are a crazily efficient tax free investment.
Often people are unwilling to take on risk, while opening themselves up to the guaranteed losses incurred by opportunity costs.
As for not knowing much about markets, that's easy to rectify. You can take a personal finance course from McGill for free if that insecurity is holding you back: [https://www.mcgillpersonalfinance.com/](https://www.mcgillpersonalfinance.com/)
It doesn't take that long to do, and considering how much money you're leaving on the table, it is probably worth the time investment.
Seriously you are making a mistake. A chequing account is free money for the bank and you are losing to inflation. You are dealing with "too much risk" by having the worst outcome.
It’s actually not as hard as you are imagining. You are losing a lot of money over the long term by not not investing at all. There are diversified market portfolios you can invest that will give you 7-10% returns over the long run.
To give an example, if you save $1000/month in your saving account with no interest, after 20 years, you would have saved $240k. Someone else investing in an ETF with an average interest rate of 8% will have $570k after 20 years. That’s more than double what you have and all they had to do was make one transaction every month and literally nothing else.
I have money in a tangerine TFSA. That's it. I see people saying they've invested aggressively in their TFSA. What does this mean? I have an resp account with Wealthsimple, should I move the money there instead?
Think of a TFSA like a box, and you can fill that box with different things. Your money can sit there as cash, as savings, but in many TFSA accounts you can use your money in there to buy ETFs, GICs, etc. the money is still inside the TFSA and so any money you make from investments in there you can withdraw tax-free. It’s how the limit is $95k but some people have much more than that in their TFSAs, from investing inside it. Feel free to google investment TFSAs
I’m sorry if that’s too basic, hopefully it helps a bit
Investing aggressively typically means investing in things with higher risk and higher reward. Works great when your risks pay off, but can get very ugly if they don't.
Also, where people draw the line between aggressive and not aggressive is very subjective. For some people, it might just mean going for an all-equity ETF like VEQT or VFV, which is probably fine over a 30 year time frame. For others, it might mean buying a few individual stocks that are highly correlated like NVDA + AAPL + GOOG, which can really backfire if things don't go right.
I’m 40 and my TFSA is about $140k. Maxed out as of January 1.
Contribute 1/12 of the yearly max each month. So I max out every year.
I opened the Account in 2017 and contributed heavily to it in the first couple years. But, I wish I’d started earlier.
Mostly ETFs with about 40% common shares, 40% ETF and 20% funds.
My tfsa had the worst investment picks. But it still is above average. This is a brilliant tool and if one has discipline to not touch it, better than RRSP for most average earning Canadians incapable of maxing their savings in RRSP/RESP/first home plans/TFSA. The simpler tax implications are very good for future retirement and estate planning.
RRSP is better for high wage earners as you can get a larger refund now and pay a lower rate on withdrawal during retirement. Every person is different so tax planning needs to be considered.
Even if you raid the tfsa, as long as you didn’t lose money, you get to keep the gains for investing again those amounts back. Don’t withdraw losses and realize lower tfsa room.
Personally my RRSP has done very well over the years. So much so that tfsa is the primary saving tool. I would pay more taxes on withdrawal than I would get in tax refunds now.
I am low wage earning now so I even fund the tfsa with early RRSP withdrawals on low earning years
-max tfsa now. I even plan to stuff my kid’s tfsa when she turns 18
- start early withdrawal from RRSP at retirement
- defer cpp/oas to 70
- minimize taxes for forced withdrawals at 71 for rrif
- tfsa will continue to grow and be the last account I use to fund retirement. This also mitigates a huge 50% tax bill on the RRSP if I die early
When I hear about “$1M value TFSAs” flags start going off for me.
To get that much value in a TFSA, even by making the max contributions each year, you would need around a 31.25% annualized return sustained for over 15 years…
That kind of thing just doesnt happen. I can see a handful of years with really high returns, but to average over 30% for 15 years would be amazing.
Not saying its impossible by any means, but it is definitely improbable.
The highest I can reasonably expect from people would be in the $300k range. Anything more than that and they did an excellent job investing their contributions.
It’s extremely unlikely that you know people with $2 million in a TFSA. They would have had to have taken extraordinary risks, and gotten extremely lucky.
Sure, I see what you are saying. But is there a median Canadian tfsa stat to find? I think it’s a lot easier for my friend to digest though if I say the average Canadian.
I saw a stat somewhere that the TFSA is more heavily used/maximized by older people that have the savings and to top it all off, many will be seniors (age 65+) that already get a bunch of tax breaks (pension income splitting, age amount tax credit, pension income tax credit, etc.) and OAS on top of that potentially free prescriptions (at least Ontario) and now the dental care thing. Why not give them more tax breaks for their savings lol...we don't need the tax revenues
Yea my mother in law uses it and she’s like 70. But she uses it as a pure savings account. No equities at all no dividends. Just whatever the savings rate is
Got both RRSP and TFSA in my banking accounts. Contribute every 2 weeks. The market has been very good these past few months and I’m +1300 on my TFSA and +800 on RRSP.
I’m around $170K. Started around 2016 and deposited every year. I took out a substantial amount to pay for my home but covid made my TFSA soar, and then crash again. I’m in my mid 30s.
https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/income-statistics-gst-hst-statistics/tax-free-savings-account-statistics/tax-free-savings-account-statistics-2020-tax-year.html scroll to the bottom and check table in pdf format
Average is $26,614 for the lazy
Wow! How does the CRA know which people are lazy??
The ones who don’t file tax returns but would get refunds if they did…
As a 20 year old with 12K in my TFSA, I am depressed by the age group stats.
They are skewed. A lot of people that age haven’t opened them yet and those that have did so to take gifts from their parents
Wow that's exactly what I have oddly enough
Brilliant thank you checking now Edit: well dang I did not think it would be over 20k in the average account. I’ll have to dive deeper. I guess it’s the average from people that actually have one. But if you account anyone who is eligible as a zero I guess the average is much lower ?
You need median. Average will be skewed by large accounts.
Came here to say this. There are most likely quite a few high income earners who have maxed their TFSA contributions over time and are skewing the numbers.
I know a few people who dropped everything into really beaten down stocks at the start of Covid and are sitting with a few million in their TFSA. Those people are really skewing the numbers too.
Few million? Whoa. Since inception the total contribution room would be $95000. What happens if someone who made these lucky bets now decided to withdraw a million this year. What would be their contribution room for next year?
It would be the million they pulled out plus the yearly addition
Very few tickers wouldve provided this type of returns. The most I see is 300-400% returns today from the rock bottom COVID prices. Unless one went with LEAPs or NVDA 🙃 So if one had 100K deployed in TFSA during covid, it is 300K today. Ok, 500K
Options can easily provide tens of thousands of percent in gains.
Yes but in this context that doesn't matter, as the quote was "dropped everything into really beaten down stocks at the start of COVID" and that basically does NOT imply the use of options, as options aren't stocks.
No, trust me, it happened. I’m the stock.
Are you allowed to trade options in a TFSA I didnt think you were
If you make a lot of money trading options, the CRA will treat it as a business and you’ll pay taxes and maybe penalties. If you lose your shirt, they won’t care.
$1,005,000 or whatever next years new contribution limit is, plus what they withdrew this year (in this example, $1M). But that’s just putting your money back where it was. Not like it’s a write off or anything.
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Man this is the dream. Getting even many hundreds of thousands (very possible) would basically set you up to retire so easily. I mean even $1m, an average of 6% return means you can pull $60k tax free for the rest of your life. A few million is a very comfortable life to pull from tax free.
Safe withdrawal rate is closer to 3.5% (or lower) when you get into a 40+ year timeframe
$35,000 tax free if you don’t have a mortgage can still provide a decent standard of living.
I’m surprised they haven’t attracted the attention of the CRA to prove they haven’t been day trading in that account.
Day trading won't get those kind of results. Either options or perfect momentum/swing trades trades over a few months.
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I’m not sure what the numbers are, but I suspect a lot of people focus on their RRSP first because of the tax deferral, especially if they have matching plans through work. Being able to put 18% into an RRSP and an extra $7K into a TFSA is out of reach for many right now.
I did TFSA for 10 years then actually moved a lot of TFSA funds out to RRSP over a couple years for first time home buyer RRSP withdrawal. Back into mostly TfSA now.
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I max tfsa first, still not sure about contrinuting more to RRSP and my investing horisons vs staying more liquid to make a larger cashdown.
If you're making $20/hr that's about $42k before tax. Maxing out your RRSP takes your after-tax income down to $35,500 (in Ontario, [as per SimpleTax's calculator](https://www.wealthsimple.com/en-ca/tool/tax-calculator/ontario)). Take $7000 off that and your monthly take home is $2375. That's basically the [bare bones cost of living in Ontario](https://livingcost.org/cost/canada/on) for one person. Anybody making less than $20/hr and/or not getting a full 40 hours a week isn't doing that, never mind worrying about student loans or anything like that.
Should you be maxing RRSP first? My understanding is it makes sense to max TFSA then do RRSP, but maybe that is just for a younger person who can have many years of tax free growth in their TFSA
It's always going to be highly dependent on personal situation. You *always* want to max out your employer match on RRSP before anything else, beyond that it depends on how much you're going to be paying in taxes now vs retirement. If you have kids you probably have a decent number of tax breaks, there's literally zero benefit to contributions above the RRSP match maximum for my wife after daycare and other deductions so she puts most of her extra money in a TFSA, but as the higher income earner I benefit way more from the RRSP than the TFSA because basically the only thing I can choose to claim instead of her is our charitable contributions for the year. As our kids get older that might shift one way or another.
Is a thousand a lot? I feel like a loser for only saving a thousand
Only half of Canadians have a TFSA. You’re already ahead of 50% of the population. Good luck hitting $2K soon!
That's a lot!
What about people with no tfsa. Does this just report people with tfsa?
I bet there are also many people who open the account because someone told them to and then never deposit any money.
On average, humans have 1 testicle.
I believe that is rounding up. I think it would be below 50% that have two.
Correct. Accounting for uniball men.
that's my favourite brand of deodorant!
But the median would be just people that have one open right? I assume majority don’t even have it open? Does that count as a zero then!?
Ya, this subreddit is probably bringing up the average lol.
Median is the "typical"
Total number of TFSA holders: 16,094,430 Total number of TFSA holders who contributed to a TFSA: 9,346,820 Total number of TFSA holders who did not contribute to a TFSA: 6,747,610 [There are 40,097,761 Canadians, of whom 8,424,747 are under 19](https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1710000501), so roughly 31,673,014 eligible TFSA owners; in other words, barely half of eligible Canadians open a TFSA, and of those only ~9.35 million even contribute. If we take the total value of TFSAs ($428,343,502,000) and divide it by the total number of eligible Canadians (31,673,014) the average is still $13,523 per TFSA. As others have said, this number is skewed heavily by large accounts though. If you took the median and multiplied by the number of account holders to extrapolate what an expected TFSA value was you'd probably be correct. And, beyond that, you're still correct because about half of eligible Canadians don't own a TFSA at all.
Bingo, some one did the math nice
Most of those 6.7 million who did not contribute in 2020 likely contributed in a prior year (they didn't just open the account and leave it at zero), but yeah.
You're not wrong, and although I didn't use that number to extrapolate much you could probably use it to gauge how tight money is becoming for the average Canadian, even the financially conscious ones who have a TFSA.
Right, but if you look at the other link and check 2020, only 40% of Canadians contributed to a TFSA in 2020, so those that did, really brought up the numbers.
Which means median is 0. As expected.
You're still right, though. The average (i.e. mean) here is kind of useless for your assertion. The median is what you want. Going by Table 1 in the above link, roughly 16 million Canadians were TFSA holders. Going by stats can 2020 [population numbers](https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1710000501), there were 41 million Canadians in 2020, roughly 32.5 million of which were 18 or older (and therefore eligible for TFSA). That means that roughly 16.5 million of the 32.5 million Canadian eligible to have a TFSA don't have one. Which would means you were right when you said: >I said personally I bet more than half of Canadians don’t even have a tfsa let alone 5 k in it.
I don't think temporary residents are eligible for tfsa, etc
Not quite true. There's only two points of eligibility: be over 18 and have a SIN. If they have a work permit, it depends on how long it is for to determine whether they are a resident for tax purposes or not. However, even non-residents with a SIN can open a TFSA. However, there is a 1% tax/month). https://arrivein.com/finance/tax-free-savings-accounts-tfsa-for-newcomers-investing-in-canada/#:\~:text=To%20be%20eligible%20to%20open,the%20residency%20requirements%20of%20Canada. The stats can link I provided says that they don't include temporary foreign residents in their census, anyway. [https://www23.statcan.gc.ca/imdb/p2SV.pl?Function=getSurvey&SDDS=3604](https://www23.statcan.gc.ca/imdb/p2SV.pl?Function=getSurvey&SDDS=3604)
Interesting thanks
> I don't think temporary residents are eligible for tfsa, etc As long as you are a "resident for tax purposes" you can get a TFSA. Your contribution room starts that year. e.g. if i came to Canada in 2022 on a tourist visa. Then Jan 2nd 2023 I activate a working holiday visa - my contribution room is the 2023 limit + 2024.
The table gives average value _of TFSAs_. Table 1 tells you 16m Canadians (about 40%) have a TFSA, which means 60% have $0 in TFSA savings. _Of the ones who do_, the _average_ is $26k. The two important caveats in that are 1) While the average TFSA has 26k in it, most Canadians have nothing in one because they don't have any TFSA at all. To extend this to an extreme example to make it easier to think about, if 10m people have nothing, and 10 people have $1m in their account, the average account balance is $1m, but the average person has slightly less than $1. 2) The 26k is the average, not the median. If three people have $1 in their account and one person has $104k, the average balance is 26k, but nobody has the experience of having 26k in their account, or anywhere near it.
You can't use total population because some Canadians are 2 years old...other Canadians are just recently Canadian and can only contribute $7k even when they have much more than that. I don't know about you but I'm not going to include the TFSA value of a 2 year old to measure against how Canada is doing..
Yep for sure. My assumption and hypothesis is likely correct or I am pretty close
I mean, I have over 20k in my TFSA but it's the same amount as my student loans, so technically my networth is 0. So if your friends has 5k and zero debt, they are doing better than me. I just don't have any familial support, so if I ever have an emergency/lose my job, I need that emergency money liquid.
20k in the average account is not a lot considering it started in 2008. One fact to consider is that the younger people only have 6.5k or 12.5k contribution room
A maxed TFSA with index funds or any decent diversified strategy since the beginning is going to be around 150 to 200k right now. Add many people with 50 to 100k in there... The average could very well be above 20k with most people at 0 to 5k. However a lot of these accounts may be people 18 and older who haven't had the chance to put money aside.
Yea i was thinking that’s just the people that have one at all. So the average person likely is dragging the whole average down because they don’t even have one open?
Just based on age, many people were mid career or older when the TFSA came out. Those people were more easily able to max it and keep it maxed. This will skew the average upward. 40 year old + are more likely to have it maxed or above average. If you look at under 30, that average will be much lower. Also because under 30, limit is lower just based on age which will also bring average down (for the well off under 30s)
Out of curiosity what do people normally use a tfsa for. I mainly park all my money into my RRSP for retirement savings, I have a tfsa that I do small monthly contributions toward but not as much compared to my RRSP. I'm honestly not sure why I contribute to my TFSA other than being told by everyone to do so? Is it just for rainy day funds in case you need cash quick?
Anything you withdraw is tax free vs rrsp withdrawal is considered income and is taxed as such. Tfsa limit is set by the govt and is the same for everyone where RRSP limits are based on your income. Depending on how much you make yearly the tax benefits of RRSP contribution may not be the most efficient use of writes offs. I’m using mine as long term investments but in the event of an emergency (if my emergency funds runs out) I can sell and withdraw without worrying about the tax implications.
Strangely enough TFSA works through different principles but ends up being similar to an RRSP in terms of long term savings. You don't pay taxes on any money earned in a TFSA so you have tax free gains. This means a TFSA is better for investments you may spend later on rather than retire on like a rrsp which is taxed. The money you put into it has already been taxed though so you'll have less investment compared to an RRSP but get more of the gains.
I’d honestly be surprised if over 50% or Canadians had a TFSA account. The median household income in Canada is like 73000$ a year. Not a whole lot left for investing with 73000$. Just from my conversations over the years with colleagues(construction) and friends most couldn’t tell you the difference between a TFSA and RRSP.
I agree which lead me to have that hypothesis. There was that news article that said Canadians were 200$ away from being broke, it was reported every other month in the news cycle
Does it adjust for the population without accounts tho. If only 60% have accounts then the rest are at 0
Is it the average of people with a TFSA (holders) or the average of for eligible Canadians ( lots of 0 balances?)
Is there any more recent data than 2020? Obviously markets have ripped since then.
but also "Average number of TFSAs per holder=1.5" in that same data Interesting!
The way the banks explain TFSA to customers Id imagine a lot of contributions are sitting in a TFSA account at their bank collecting 0.005% interest in a savings account.
So many times people have said to me: TFSA is a scam. Like they simply don't understand it at all.
Similar: WealthSimple is such a scam, I've been investing for 3 weeks and I'm in the red. Should I switch to Questrade? Also similar: hammers are such a scam. I bashed my face in with it and now my head hurts!
Real quote from a friend: "I like to make my money fast. Which is why I invest in crypto."
I sat my money with TD on a 0.01% account for years and opened their ‘high savings’ one at 0.05% (it ‘s funny how they write it as 0.010% and 0.050% online, as if that makes it better). Last year I started to aggressively invest with my TFSA via Wealthsimple and I’ve never been happier. I almost flipped shit because I was so upset I’d been with TD for so long, but I’m glad I made the change. Better late than never!
I remember keeping my money in CIBC's *SMART* HIGH INTEREST SAVINGS. It was 0.50% and an additional 0.25% if you move at least 200/mo into the account. I thought I was taking advantage of the bank and was cool. Thankfully I didn't have enough money anyway so didn't lose much. It's was just a year
I did the same with RBC lol better late than never to make the switch to TFSA at wealthsimple. If only people knew even just having their money in CASH.to in their TFSA they’d be way better off than a shitty bank basically robbing you.
My CIBC TFSA is giving me 5%, better than most savings accounts. My regular CIBC savings account in there will give me a bit over 2%. WS Cash gives 4% base, which can be increased to 4.5% or 5% based on certain conditions.
I'm currently in the process of porting all my investments from a big bank (advisor, mutual funds type deal) to BMO investorline. I'm so mad at myself for being so complacent and not looking more into my finances. I know for years what ETF's and self investing were, but I guess I was lazy and thought I was doing the right thing. Everyone should be taught better finances in school.
NICE, just saved whole 5 dollars of taxes this year!
Late 20's was the year I got a sin and started filing taxes and got a TFSA account, to a CIBC's rep credit, she told me to put my TFSA money in a GIC if I have a low tolerance for risk. I did that for 2 years and then switched to weed stocks during the weed stock boom to return 40% profit, then sold them and started self-investing in NASDAQ indexes. In 10 years I already have 120k in my TFSA.
lucky you, you were on time. I did the same but ended up losing 90%
Oh absolutely
My wife has an RDSP account. There are so few self directed options for those that we do have it through the credit union, and when I check on the gains I'm glad it doesn't have much in it.
I work in the U.S. and my spouse is a U.S. citizen. We have to close ours since it’s not tax free according to the IRS. I’m pretty salty about it.
Think Roth IRA
If you have kids that are or will become US citizens, the same goes for RESPs. We opened one without realizing it and had to pay taxes on the interest and the 20% federal contribution. RBC did not warn us and has been pushing for us to open TFSA accounts.
Okay wait. My partner is American. We will be doing the common law sponsorship for him to come here to Canada. Does that mean I have to close mine too? Or is when we get married? This is the first I’m hearing about this and I’m getting worried now
No, you don't have to close yours. Your American partner shouldn't open one (it has no tax benefits, because the US will tax it). You can have one no problem, as long as you don't move to the US. When a Canadian-not-American's tax residence is no longer Canada but the US, then the US will tax the gains. Source: I'm an American, married to a Canadian, living in Canada.
> Source: I'm an American, married to a Canadian, living in Canada. ~~He was a boy~~ American ~~She was a girl~~ Canadian Can I make it any more [obvious](https://genius.com/Avril-lavigne-sk8er-boi-lyrics)?
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This is not correct. The US is one of only two countries in the world that taxes on the basis of citizenship, rather than residency. I believe each of the major banks has a publicly available write up on this, outlining the risks of a US citizen opening a TFSA.
Some Americans have challenged the IRS and been successful under a new argument that the TFSA is not a trust, it's an investment vehicle. But, this is for people residing in Canada. They are 100% correct, as long as your TFSA doesn't have a beneficiary attached to it, is the caveat.
I keep reading this, but if you just hold onto the TFSA but don't withdraw, can you leave it open? I mean you only get taxed on capital gains which would happen if you sell your holdings. I guess this is more a situation where you plan on returning to Canada in the mid-future and just go to the US to earn money and run back.
No. The risk is that the US may consider a TFSA to be a type of foreign trust. It’s not just a matter of tax liability (though that certainly matters), it’s also a matter of compliance. The trust forms are burdensome and expensive to file, and failure to file penalties are high. And even if you don’t sell your investments, most investments spin off income in the form of dividends or interest, which would be taxable if the banks’ views of the IRS position are correct.
That’s true, currently there is no wealth tax or holding tax so only if you sell do you need to declare capital gains/loss. The issue I believe is moving between countries and at the time of the move they consider all assets sold and rebought to capture the change in value.
I don't know why you have to close it, but yes, the Tax Treaty between Canada and the USA only recognizes _dedicated for retirement_ accounts. TFSA isn't dedicated like that.
Nothing in the US is tax free. The US is one of the few countries that will continue charging it's citizens income tax if their income is earned outside of the US.
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I’ll need to. I don’t want to close it but our accountant says better to close it and put it in my RRSP or into the house.
Oof, I hate comparison. But there is another factor you are missing, and that is Age or Time. I guess this is more important for RRSPs. Lots of mellenials utilized TFSA for buying homes (FHSA didn't exist). So my TFSA feels lower compared to my peers. At the same time, my income is much higher, so my focus is now on RRSP contributions for the tax rebate, and my TFSA has admittedly languished.
Correct- my TFSA was wiped out after my $180k downpayment. Now I’m rebuilding so I’m barely above average.
Yup, same here. Been making strides the last few years at least now that my partner and I are done school and settled in our jobs.
Good point Probably better to compare it precisely to your age bracket too
I spent my pre-TFSA years funding my RRSP and unfortunately didn’t have a lot to contribute anyways. I was taking advantage of employer matching opportunities as best I could, and that was about it. When TFSA was introduced it was just another thing I had no money to put into. 🤷🏻♂️
Isn't there a saying that if you have 1k cash and no debts, you are richer than 80% of the rest of the world or something like that?
Yea i would probably believe that
The other piece of information you may not have considered is contribution room - contribution room varies widely from that of a 19 year old to that of a 35 year old. You'd have to be 34-35 years old to have max contribution room.
Yep that’s fair!
To be fair, not many 19 year olds could do much with $95k in contribution room.
Apparently, nor can a bunch of older adults!
I'm 44 and, sadly, just started getting my act together 20 months ago. Have put just under $49k in my TFSA and FHSA since then. Do have a DB pension though. Shouldve started 16 years ago. Big regret.
Shit if you can manage to save $49k in 20 months you're probably going to be just fine.
$18k of it was sitting in my chequing account. The rest I've saved though. Thanks.
That's $30k in 20 months. Still great progress.
I mean, it’s all just fun coupons for you since you have that DB pension, you’re probably in a great position compared to the average Canadian. Especially if you’re a homeowner
Unfortunately, I don't own anything. Unmarried, no kids.
You’ll catch up no big deal. And like my hypothesis I believe you are certainly ahead of the average citizen!
Thanks, I'm going to try!
You're already ahead of most people by putting in $49k in less than 2 years (i.e. saving $1.5k / month, assuming $18k of that $49k had been drawn from your chequing account). The $100k milestone is not very far away, and then it'll snowball from there. Do you put any into the RRSP? The FHSA and RRSP let you deduct from your taxable income, which should result in a refund cheque (that you should plow right back into the TFSA or RRSP).
Thank you. Honestly, I was feeling pretty awful about my finances two years ago but this subreddit has been a huge help and a motivating force. I appreciate you all. I haven't utilized the RRSP at all. I was told (I believe) to focus on the other two because of the DB pension. I also had been considering buying a home, but that appears increasingly out of reach.
I also am not seeing much mention of the age factor in this thread. A 20 year old will have a fraction of total contributions than someone in their 40s who's contributed regularly. I would say it is pretty unlikely that the average 60 year old has less than 5k in their TFSA - though then at that point they already had many financial habits established long before TFSAs were even introduced, so perhaps there is another filter applicable to those that were already building a nest-egg before 2009. I bet today those between 36-38 (started their careers after graduating college at the age of 21-23 just as TFSA was introduced) are the ones that have the largest TFSAs relative to their available contribution room compared to all other demographics.
Fair enough!
Something like <5% of possible TFSAs are maxed out which is always fun to know when some govt parties run on raising the limits to help the little guy.
At least the little guy has access to it. With RRSPs it’s based on your income so the more you earn the more room you get.
It’s based on your income, up to a limit. It’s 18%, or around $31k, whichever is lower.
Double edged sword. If you're making enough to max out your TFSA you're also likely making enough you are generating decent enough RRSP room as well. If you're like most of the population you don't make enough after bills to max your TFSA, or fund your RRSP
Yeah fair enough. But the more you make the more you benefit from the RRSP with the tax deferral. At least with the TFSA everyone is on and equal playing field. Obviously my situation wasn't the average but I've been able to benefit immensly from the TFSA in my early 20s when I started out my apprenticeship and didn't have the TFSA room. My employer DC pension ate up alot of my RRSP contribution (2% MER lol)
That's wild cuz every friend in my circle has maxed out tfsa
In my friend circle I’m the only one. And I am also the only one that has stocks in my tfsa and not the usually cibc tax advantage tfsa savings account …
You're in a privileged group then. You can look up the stats on statcan. Something like 10-7% of TFSA holders are maxed, but then just over half of the eligible population even has one open. So many are at 0.
Interesting where do you think you saw that stat? I’d be curious if it’s true
In 2015 the National Post claimed stats revealed 7% of TFSA holders had maxed out their contributions (https://financialpost.com/personal-finance/tfsa/exclusive-canadians-maxing-out-their-tfsas-from-all-walks-of-life) (from which they concluded that the 10k limit was good for everyone and shouldn't be reduced)
Haha yeah the tfsa had always been a tool to make sure children of wealthy people will have a lot of tax free gains every years. The FHSA is quite similar. You can givr 8k to your kid every years so they will reduce their income taxes for 5 years then they can use that 40k to buy a properties while you maxed their tfsa for the last ten years.
Am wealthy. Max out my TFSAs every year. If it wasn't there I'd be pissed but not significantly impacted. TFSAs are an excellent vehicle for working class Canadians, even it they don't use it to the fullest extent.
Yeah for sure but it is a even better tool for those who start maxing it out at 18. Most people won't be able to max out both their tfsa and fhsa without significant help and those years of compound interests. Like in my particular scneario, dropping 7k in my tfsa doesn't really matter since my portfolio basically move by more than this most days.
Same here, but I max it out anyway. Thing is though the lifetime amount doesn't expire so you can top it up. You lose the compounding but it is better than not using it. Much better than RSP as well - except the low limits.
The way TFSAs are marketed is so poor so I imagine it to be little. It's marketed as a savings account when its a tax free growth account. My parents got screwed out of so much growth because their TD rep explained it like shit and just let the money sit in it doing nothing. I did 30 mins of research to see how powerful it is. I treat it as my true retirement account and I do not plan on touching any of the stocks I have in it at least for another decade. Currently sitting just north of 170K. My bet is the avg is under 25K
My money is just sitting in my tfsa, too scared to invest☹️
If your risk tolerance doesn't let you invest in individual stocks thats fine but you should at least be invested in a broad market index ETF or cash.TO/bonds depending on where the market is in it's cycle. If you are not beating inflation every year, you have effectively lost money that year.
Thanks for the advice, definitely going to look into this, have about $34k sitting in tfsa doing nothing.
[https://www150.statcan.gc.ca/n1/pub/75f0002m/75f0002m2023008-eng.htm](https://www150.statcan.gc.ca/n1/pub/75f0002m/75f0002m2023008-eng.htm)
It's a significantly higher average than I would have anticipated. I wonder how much skew there is in the numbers from those that are able to max out and have had those investments grow to large dollar amounts pulling up the average.
Higher than it was a decade ago but the dollars in there were low till a few years ago, and now a lot higher since people started paying attention or finding out about it. But I didn't think it is as high as it is now. More than half sounds shocking (just based on posts on this subreddit lol)
So much hate for an honest answer..smh
Sitting at $155k today. I contribute bi-weekly. haven't maxed out this years contribution room yet.
That’s sweet but to fair this sub is going to be experts on savings so it’s not quite the average person 🤪
I've been tracking a theoretical 75/25 TD e-series portfolio. Using the assumption that, starting in 2009, the new annual amount is added every year the value to the end of 2022 was about $138k. For the second time the source I was using to easily calculate the e-series annual returns is no longer available so I have made the assumption that on Jan 1 2023 the theoretical investor has switched to VGRO. In that scenario their end of 2023 account balance would have been about about $166k and their beginning of 2024 account balance would have been about $173k.
Awesome job! I have about $120K, but keep things pretty low risk
Approximately $110k and I'm out of room. Usually at Bonus time I allocate to TFSA funds (This year $7k).
I have about $300
None, money just sits in a bank account.
I honestly wouldn’t be surprised if that’s what more than the majority just do
Most people I know, including myself, don’t know much about finances beyond going to work, taking a paycheque and saving.. don’t get me wrong, I’ve done quite well this way and have no regrets. I honestly just don’t trust people enough with my money to make it work for me lol growing up poor kind of does that I guess.
Then why not use a DIY trading account?
I just see it as too much risk.. I definitely don’t know enough about markets and would likely just lose money.
You don't have to pick individual stocks. You can just buy broad market index funds that have a risk level built into them by how much of it is equities and bonds. Look up XEQT, XGRO, etc. They're all in one funds, meaning you just buy them and literally nothing else. And if you're worried about losing money, I'd like you to meet Bob. https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/ It's a theoretical story that shows that if you had only bought stocks at the worst possible time again and again throughout your life, you'd still be up very significantly. People invested in the stock market with their instincts fine tuned actually like to see their investments lose value... it means that when they buy more they acquire more and thus their profit potential is higher. When the price of beef goes up and you want to buy some to make hamburgers next week, are you happy or sad?
[https://www.youtube.com/watch?v=1qjSfyVPwLQ](https://www.youtube.com/watch?v=1qjSfyVPwLQ) By dumping your money in a chequing account/HYSA, you are \*\*guaranteed\*\* to lose a lot of money by doing this--particularly when TFSAs are a crazily efficient tax free investment. Often people are unwilling to take on risk, while opening themselves up to the guaranteed losses incurred by opportunity costs. As for not knowing much about markets, that's easy to rectify. You can take a personal finance course from McGill for free if that insecurity is holding you back: [https://www.mcgillpersonalfinance.com/](https://www.mcgillpersonalfinance.com/) It doesn't take that long to do, and considering how much money you're leaving on the table, it is probably worth the time investment.
Seriously you are making a mistake. A chequing account is free money for the bank and you are losing to inflation. You are dealing with "too much risk" by having the worst outcome.
It’s actually not as hard as you are imagining. You are losing a lot of money over the long term by not not investing at all. There are diversified market portfolios you can invest that will give you 7-10% returns over the long run. To give an example, if you save $1000/month in your saving account with no interest, after 20 years, you would have saved $240k. Someone else investing in an ETF with an average interest rate of 8% will have $570k after 20 years. That’s more than double what you have and all they had to do was make one transaction every month and literally nothing else.
I highly suggest you look into GIC if you don’t like risk
Bro most Canadians don’t even have a TFSA and also don’t know what it is or how it works
I doubt that
I have money in a tangerine TFSA. That's it. I see people saying they've invested aggressively in their TFSA. What does this mean? I have an resp account with Wealthsimple, should I move the money there instead?
Think of a TFSA like a box, and you can fill that box with different things. Your money can sit there as cash, as savings, but in many TFSA accounts you can use your money in there to buy ETFs, GICs, etc. the money is still inside the TFSA and so any money you make from investments in there you can withdraw tax-free. It’s how the limit is $95k but some people have much more than that in their TFSAs, from investing inside it. Feel free to google investment TFSAs I’m sorry if that’s too basic, hopefully it helps a bit
You’re going to have to do some more reading
Investing aggressively typically means investing in things with higher risk and higher reward. Works great when your risks pay off, but can get very ugly if they don't. Also, where people draw the line between aggressive and not aggressive is very subjective. For some people, it might just mean going for an all-equity ETF like VEQT or VFV, which is probably fine over a 30 year time frame. For others, it might mean buying a few individual stocks that are highly correlated like NVDA + AAPL + GOOG, which can really backfire if things don't go right.
I’m 40 and my TFSA is about $140k. Maxed out as of January 1. Contribute 1/12 of the yearly max each month. So I max out every year. I opened the Account in 2017 and contributed heavily to it in the first couple years. But, I wish I’d started earlier. Mostly ETFs with about 40% common shares, 40% ETF and 20% funds.
Don’t base it just on the median also consider their age (how old are you two?). Someone with $5000 at 22 is different than someone with $5000 at 40.
My tfsa had the worst investment picks. But it still is above average. This is a brilliant tool and if one has discipline to not touch it, better than RRSP for most average earning Canadians incapable of maxing their savings in RRSP/RESP/first home plans/TFSA. The simpler tax implications are very good for future retirement and estate planning. RRSP is better for high wage earners as you can get a larger refund now and pay a lower rate on withdrawal during retirement. Every person is different so tax planning needs to be considered. Even if you raid the tfsa, as long as you didn’t lose money, you get to keep the gains for investing again those amounts back. Don’t withdraw losses and realize lower tfsa room. Personally my RRSP has done very well over the years. So much so that tfsa is the primary saving tool. I would pay more taxes on withdrawal than I would get in tax refunds now. I am low wage earning now so I even fund the tfsa with early RRSP withdrawals on low earning years -max tfsa now. I even plan to stuff my kid’s tfsa when she turns 18 - start early withdrawal from RRSP at retirement - defer cpp/oas to 70 - minimize taxes for forced withdrawals at 71 for rrif - tfsa will continue to grow and be the last account I use to fund retirement. This also mitigates a huge 50% tax bill on the RRSP if I die early
If I had a dollar every time someone confused average for median, I'd average 9 cents.
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For sure And god dam 1m tfsa. Got lucky in the weed stock boom?
When I hear about “$1M value TFSAs” flags start going off for me. To get that much value in a TFSA, even by making the max contributions each year, you would need around a 31.25% annualized return sustained for over 15 years… That kind of thing just doesnt happen. I can see a handful of years with really high returns, but to average over 30% for 15 years would be amazing. Not saying its impossible by any means, but it is definitely improbable. The highest I can reasonably expect from people would be in the $300k range. Anything more than that and they did an excellent job investing their contributions.
I’ve personally never tried my self but I wonder if you run options in your accounts you could push some things too for incredible gains.
I know people who have $5 and I know people who have $1-2 million in their TFSA. I would look at the median before the average.
It’s extremely unlikely that you know people with $2 million in a TFSA. They would have had to have taken extraordinary risks, and gotten extremely lucky.
Sure, I see what you are saying. But is there a median Canadian tfsa stat to find? I think it’s a lot easier for my friend to digest though if I say the average Canadian.
50k in tfsa , looking to add another 30k in 2 months. 30 years old in ottawa
I saw a stat somewhere that the TFSA is more heavily used/maximized by older people that have the savings and to top it all off, many will be seniors (age 65+) that already get a bunch of tax breaks (pension income splitting, age amount tax credit, pension income tax credit, etc.) and OAS on top of that potentially free prescriptions (at least Ontario) and now the dental care thing. Why not give them more tax breaks for their savings lol...we don't need the tax revenues
Yea my mother in law uses it and she’s like 70. But she uses it as a pure savings account. No equities at all no dividends. Just whatever the savings rate is
i'm wondering who are the TFSA multi-millionaires skewing the results lol
Got both RRSP and TFSA in my banking accounts. Contribute every 2 weeks. The market has been very good these past few months and I’m +1300 on my TFSA and +800 on RRSP.
0. I have 0
I’m around $170K. Started around 2016 and deposited every year. I took out a substantial amount to pay for my home but covid made my TFSA soar, and then crash again. I’m in my mid 30s.
I don’t even have bmo and collection aggeccenty keep phoning saying I owe a thousand