A $37,600 Tax-Free Financial savings Account (TFSA) stability would be the quantity Canadians approaching 60 ought to begin monitoring.
That was the typical honest market worth for TFSA holders aged 55 to 59 within the 2023 contribution 12 months, based on Canada Income Company (CRA) knowledge. For these aged 60 to 64, the typical rose to $45,109.
A TFSA isn’t purported to be judged solely by what sits within the account right now. It must also be judged by what it may well nonetheless turn out to be. For Canadians approaching 60, the account can play a highly effective position as a result of withdrawals are tax-free, funding development is tax-free, and the cash doesn’t set off the identical taxable-income points that may include retirement account withdrawals.
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What to contemplate at 60
An individual approaching 60 might want tax-free revenue earlier than taking Canada Pension Plan (CPP) advantages, whereas delaying Previous Age Safety, or whereas drawing down Registered Retirement Financial savings Plan (RRSP) belongings strategically. A TFSA also can act as a cushion for dwelling repairs, healthcare prices, journey, or household assist with out including taxable revenue.
Contribution behaviour exhibits that many older Canadians perceive the worth. Statistics Canada reported that tax filers aged 55 to 64 made $17.68 billion in TFSA contributions in 2023, with a median TFSA contribution of $6,500.
So, are you on observe?
A TFSA stability close to $40,000 could also be typical for somebody approaching 60. However “typical” isn’t the identical as “sufficient.” A family with a pension, no mortgage, and modest spending may have much less from a TFSA. One other family with restricted pension revenue and rising prices may have much more.
The higher query is what job your TFSA must do. If the aim is emergency financial savings, money and assured funding certificates (GICs) might make sense. If the aim is tax-free retirement revenue over the subsequent 20 or 30 years, shares can nonetheless deserve a spot within the account. That’s the place Royal Financial institution of Canada (TSX:RY) enters the image.
RBC
RBC inventory isn’t some speculative TFSA inventory. It’s a core Canadian monetary inventory for buyers who need a mixture of dividends, earnings energy, and long-term compounding. The financial institution operates throughout private banking, industrial banking, wealth administration, insurance coverage, and capital markets, giving it a number of methods to earn via completely different financial cycles.
Throughout latest earnings, RBC inventory reported second-quarter 2026 web revenue of $5.5 billion, up 25% from the prior 12 months. Adjusted web revenue was $5.6 billion, up 23%. The financial institution additionally has a robust capital place. Its frequent fairness tier-one (CET1) ratio stood at 13.5% within the second quarter, and administration stated the financial institution returned $4 billion of capital to shareholders via buybacks and common-share dividends.
The dividend is one more reason Royal Financial institution suits a retirement-focused TFSA. The financial institution declared a quarterly dividend of $1.76 per share, a rise of $0.12, or 7%. That introduced RBC inventory to a 2.4% dividend yield at writing whereas buying and selling at about 19 occasions earnings. It’s not bargain-bin low-cost, however first rate when taking that dividend into consideration.
Issues
This all provides as much as the truth that buyers are paying up for high quality. RBC inventory might not be the inventory to purchase if somebody needs the very best yield right now. It’s higher fitted to buyers who desire a sturdy enterprise that may compound over a few years.
There are dangers even for this prime inventory. If unemployment rises, housing stress worsens, or enterprise borrowing weakens, RBC inventory may see greater provisions for credit score losses. Banks will also be pressured if rates of interest fall rapidly and margins tighten. Nonetheless, the long-term case stays robust. RBC inventory has scale, capital power, a broad earnings base, and a dividend that continues to develop.
Backside line
For Canadians approaching 60, the TFSA query mustn’t finish with whether or not the stability is above or beneath common. The extra essential concern is whether or not the account is positioned for the years forward.
A $37,600 TFSA can nonetheless turn out to be a a lot bigger supply of tax-free revenue whether it is invested with care. RBC inventory provides affected person buyers one approach to flip a typical stability right into a stronger retirement asset.
