A $37,600 Tax-Free Savings Account (TFSA) balance may be the number Canadians approaching 60 should start tracking.
That was the average fair market value for TFSA holders aged 55 to 59 in the 2023 contribution year, according to Canada Revenue Agency (CRA) data. For those aged 60 to 64, the average rose to $45,109.
A TFSA is not supposed to be judged only by what sits in the account today. It should also be judged by what it can still become. For Canadians approaching 60, the account can play a powerful role because withdrawals are tax-free, investment growth is tax-free, and the money does not trigger the same taxable-income issues that can come with retirement account withdrawals.
What to consider at 60
A person approaching 60 may want tax-free income before taking Canada Pension Plan (CPP) benefits, while delaying Old Age Security, or while drawing down Registered Retirement Savings Plan (RRSP) assets strategically. A TFSA can also act as a cushion for home repairs, healthcare costs, travel, or family support without adding taxable income.
Contribution behaviour shows that many older Canadians understand the value. 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 track?
A TFSA balance near $40,000 may be typical for someone approaching 60. But “typical” is not the same as “enough.” A household with a pension, no mortgage, and modest spending may need less from a TFSA. Another household with limited pension income and rising costs may need far more.
The better question is what job your TFSA needs to do. If the goal is emergency savings, cash and guaranteed investment certificates (GICs) may make sense. If the goal is tax-free retirement income over the next 20 or 30 years, stocks can still deserve a place in the account. That is where Royal Bank of Canada (TSX:RY) enters the picture.
RBC
RBC stock is not some speculative TFSA stock. It is a core Canadian financial stock for investors who want a mix of dividends, earnings power, and long-term compounding. The bank operates across personal banking, commercial banking, wealth management, insurance, and capital markets, giving it several ways to earn through different economic cycles.
During recent earnings, RBC stock reported second-quarter 2026 net income of $5.5 billion, up 25% from the prior year. Adjusted net income was $5.6 billion, up 23%. The bank also has a strong capital position. Its common equity tier-one (CET1) ratio stood at 13.5% in the second quarter, and management said the bank returned $4 billion of capital to shareholders through buybacks and common-share dividends.
The dividend is another reason Royal Bank fits a retirement-focused TFSA. The bank declared a quarterly dividend of $1.76 per share, an increase of $0.12, or 7%. That brought RBC stock to a 2.4% dividend yield at writing while trading at about 19 times earnings. It’s not bargain-bin cheap, but decent when taking that dividend into account.
Considerations
This all adds up to the fact that investors are paying up for quality. RBC stock may not be the stock to buy if someone wants the highest yield today. It’s better suited for investors who want a durable business that can compound over many years.
There are risks even for this top stock. If unemployment rises, housing stress worsens, or business borrowing weakens, RBC stock could see higher provisions for credit losses. Banks can also be pressured if interest rates fall quickly and margins tighten. Still, the long-term case remains strong. RBC stock has scale, capital strength, a broad earnings base, and a dividend that continues to grow.
Bottom line
For Canadians approaching 60, the TFSA question should not end with whether the balance is above or below average. The more important issue is whether the account is positioned for the years ahead.
A $37,600 TFSA can still become a much larger source of tax-free income if it is invested with care. RBC stock gives patient investors one way to turn a typical balance into a stronger retirement asset.
