Canadians approaching retirement could also be shocked by how modest the typical Tax-Free Financial savings Account (TFSA) stability is at age 50. In line with Statistics Canada information launched in 2025 for the 2023 contribution yr, Canadians aged 50 to 54 held a mean TFSA stability of simply $30,190. Maybe what’s stunning is that the identical group had a mean unused contribution room of $57,855.
The numbers recommend many Canadians usually are not taking full benefit of one of many nation’s finest wealth-building instruments. With retirement drawing nearer, maximizing TFSA contributions may make a significant distinction in long-term monetary safety and passive-income technology.
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Why unused TFSA room issues
A TFSA affords Canadians tax-free progress and tax-free withdrawals, making it a perfect account for each conservative savers and long-term traders. But many traders proceed to go away tens of 1000’s of {dollars} unused.
Even cautious traders may gain advantage by merely parking idle money in assured funding certificates (GICs). At an rate of interest of three%, the typical unused TFSA room of $57,855 may generate roughly $1,736 yearly in tax-free revenue. Over time, that extra revenue compounds with out creating any tax burden.
Nonetheless, Canadians with longer funding horizons might obtain far stronger outcomes by selectively shopping for high quality dividend shares able to delivering each revenue progress and capital appreciation.
Why Manulife could also be a superb purchase right this moment
One TFSA thought is Manulife (TSX:MFC), which lately skilled a significant pullback of 5.7% yesterday after releasing its first-quarter outcomes. Regardless of the market response, the corporate’s underlying efficiency remained stable and bolstered its long-term progress potential.
Within the quarter, Manulife reported core earnings progress of 8% to $1.8 billion on a relentless foreign money foundation, whereas core earnings per share (EPS) climbed 11% to $1.06. Its core return on fairness (ROE) reached a powerful 16.5%, and adjusted ebook worth per share elevated 6% to $39.01.
Though core earnings dipped 6% to $352 million and 4% to US$241 million yr over yr for its Canadian and U.S. operations, Manulife’s Asian operations greater than boosted outcomes, because the section continued to be its greatest progress engine. Core earnings in Asia surged 22% yr over yr to US$598 million, highlighting the power of Manulife’s worldwide enlargement technique. In the meantime, its world wealth and asset administration enterprise additionally posted modest progress with core earnings rising 2% to $448 million.
Administration stays centered on digital transformation, synthetic intelligence (AI) integration, and increasing into higher-growth markets. The insurer is concentrating on a core return on fairness of 18% or larger by 2027, suggesting confidence in continued earnings momentum.
A stable TFSA inventory for long-term traders
At $51.50 per share at writing, Manulife inventory affords a dividend yield of practically 3.8%, offering traders with engaging passive revenue right this moment whereas nonetheless leaving room for future progress. The dividend seems safe, supported by constant earnings progress, a sustainable payout ratio, and a wholesome stability sheet.
Importantly, Manulife has elevated its dividend for greater than a decade, with a 10-year dividend-growth fee near 10%. That mixture of rising revenue and affordable valuation makes the inventory a possible candidate for TFSA traders looking for reliable long-term compounding.
Buying and selling at about 11.9 occasions earnings, the inventory seems moderately priced relative to its anticipated earnings progress of 8% or extra yearly over the following few years.
Investor takeaway
The typical TFSA stability for Canadians of their early 50s stays surprisingly low, contemplating the big quantity of unused contribution room accessible. Traders who put that unused area to work — whether or not by way of conservative GICs or high quality dividend shares like Manulife — may considerably increase their retirement revenue and long-term wealth.
