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TFSAs are powerful saving tools: they allow for tax-sheltered growth while in the plan and trigger no taxable event at withdrawal. Despite this, most TFSA holders — including the highest earners — don’t maximize contributions, according to the most recent statistics on TFSAs published by the Canadian government (which are from 2019).

Across all income groups, less than 10% of TFSA holders maximized contributions to their TFSA(s), referring to an individual’s cumulative contribution room earned, not the annual TFSA dollar limit.

But as income level increased, so too did the percentage of TFSA holders who maximized their contributions. Among Canadian TFSA holders who reported $250,000 or more of total income, fewer than 30% had maximized contributions.

A look at the fair market value (FMV) of TFSAs across income groups is further evidence that Canadians are not making the most of the tax savings opportunity. TFSAs across all income groups had an average unused contribution room of $37,833 and TFSAs with an average FMV of $22,882. Canadian TFSA holders in the top income bracket had average unused contribution room of $21,956 and TFSAs with an average FMV worth $50,348.

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Percentage of TFSA holders who maximized annual contributions, by annual income

Unused TFSA contribution room exceeds FMV for most income groups