TFSA Savings Trends and Insights

Introduction

• Focus on determining if TFSA savings are on track by comparing national averages by age, income, and gender.

Average TFSA Savings by Age

• Under 20:
  • Average balance: $3,300
  • Young people exhibiting strong saving habits despite limited incomes.
• Ages 20-24:
  • Average balance: $6,500
  • Stable income leads to regular contributions.
• Ages 25-29:
  • Average balance: $10,000
  • Financial stability improves; focus on long-term goals.
• Ages 30-34:
  • Average balance: $14,000
• Ages 35-39:
  • Average balance: $15,600
• Ages 40-44:
  • Average balance: $17,600
• Ages 45-49:
  • Average balance: $21,000
  • Peak earning years; focus on maximizing contributions.
• Ages 50-54:
  • Average balance: $26,500
• Ages 55-59:
  • Average balance: $33,000
  • Critical for retirement preparation.
• Ages 60-64:
  • Average balance: $40,000
• Ages 65-69:
  • Average balance: $45,000
  • TFSAs used for covering retirement expenses.
• Ages 70-74:
  • Average balance: $49,000
• Ages 75-79:
  • Average balance: $54,000
• Ages 80+:
  • Average balance: $56,600
  • High balances suggest limited withdrawals during retirement.

TFSA Savings by Gender

• Women generally save more than men in TFSAs across all ages.
• Under 20:
  • Women's average: $4,000
  • Men's average: $3,000
  • Suggests early financial responsibility in women.
• Ages 20-24:
  • Women: $7,000
  • Men: $6,000
• Ages 25-29:
  • Women: $12,064
  • Men: $10,700
• Ages 30-34:
  • Men slightly ahead: $13,920
  • Women: $13,716
• Ages 40-49:
  • Women: $22,680
  • Men: $22,640
• Ages 50-54:
  • Women: $27,000
  • Men: $25,000
• Ages 60-64:
  • Women: $42,240
  • Men: $39,182

TFSA Savings by Income Level

• Even low-income earners benefit from TFSAs.
• $1-$4,999/year:
  • Average TFSA balance: $19,000
• $5,000-$9,999/year:
  • Average balance: $16,600
• $10,000-$19,999/year:
  • Average balance: $24,560
• $20,000-$49,999/year:
  • Average balance ranges: $22,800 - $30,000
• $50,000-$74,999/year:
  • Average balance: $30,000
• $75,000-$99,999/year:
  • Average balance: $32,000
• $100,000-$149,999/year:
  • Average balance: $36,000
• $150,000-$250,000/year:
  • Average balance: $46,000 - $63,000
• Similar balances seen in $25,000 and $75,000 income groups.

Key Strategies for Maximizing TFSA Benefits

• Motivation and Benchmarking:
  • Compare personal TFSA balances to national averages.
  • Set realistic goals based on age, gender, and income benchmarks.
• Early Start & Compounding:
  • Begin contributions early for maximum compound growth.
  • Consistent contributions lead to substantial growth over time.
• Retirement Planning:
  • Use TFSAs as part of retirement strategy.
  • Provides tax-free income in retirement.
• Wealth Building Regardless of Income:
  • Consistent contributions can lead to significant savings.
  • TFSAs valuable for low, middle, and high-income earners.
• Focus on Progress, Not Comparison:
  • Measure success by personal progress rather than peer comparisons.
  • Consistent effort is key to reaching financial goals.