TFSA Guide 2026: Grow Your Money Tax-Free

A TFSA guide for every stage of life.

Why a TFSA

Despite its name, a Tax-Free Savings Account isn’t just a savings account. You can hold investments inside it, and every dollar of growth and every withdrawal is tax-free.

• $7,000 is the TFSA contribution limit for 2026.
• $109,000 in total room in 2026 if you were 18 or older in 2009 and never contributed.
• 1% a month is the penalty on any amount over your limit.

Source: Canada Revenue Agency, TFSA dollar limits, 2026.

How a TFSA works

You save

Deposits aren’t tax-deductible, but room builds every year from age 18.

It grows

Interest, dividends and gains are never taxed inside the account.

You withdraw

Take money out tax-free, any time, and get the room back next year.

Mistakes to avoid

1. Over-contributing. Putting a withdrawal back in the same year can trigger the 1% monthly penalty.
2. Leaving it in cash. A low-interest savings account wastes your best tax shelter.
3. No successor named. Naming your spouse as successor holder keeps the account tax-free.

Withdrawals won’t cost you benefits. TFSA income isn’t counted for OAS, GIS or other income-tested benefits.

A TFSA at every age

• Starting out: Build a base. Grow an emergency fund and start investing early.
• Raising a family: Save for goals. Use it alongside an RESP and FHSA for bigger goals.
• Peak earning: Add to the RRSP. Use it after your RRSP, or instead of it if your income is lower.
• Retirement: Tax-free income. Draw income that won’t push you toward the OAS clawback.

TFSA or RRSP?

Both help you save. The right choice depends on your tax rate now and in retirement.

• Choose an RRSP. If your income and tax rate are higher now than they’ll be in retirement.
• Choose a TFSA. If your income is lower now, or you may need the money before retirement.
• Use both. Put your RRSP tax refund into your TFSA for the best of both.

Help your family. You can give money to a spouse or adult child to fund their own TFSA, and the growth won’t be taxed back to you.

Getting started checklist

• Check your room in CRA My Account.
• Invest it rather than leaving it in cash.
• Set up automatic deposits of about $583 a month.
• Name a successor holder or beneficiary.
• Track withdrawals so you don’t over-contribute.
• Review your investments with me each year.

Your room, explained

Room adds up every year from the year you turn 18, even if you’ve never opened a TFSA.

• Annual limit: $7,000 for 2026, indexed to inflation in $500 steps.
• Withdrawals: Added back to your room on January 1 of the next year.

Tips for retirees

1. Move RRIF income you don’t need into your TFSA.
2. Keep contributing: there’s no upper age limit.
3. Draw from it to help stay below the OAS clawback.
4. Name beneficiaries to bypass probate.

Add a guarantee. Holding your TFSA in segregated funds can add maturity and death benefit guarantees, and potential creditor protection.

Let’s put your TFSA to work

I’ll help you decide how to invest it and how it fits with your RRSP, RESP and FHSA.

Book a conversation with Michael, or call the office at 506-406-6100 (cell 506-440-6196). Email: [email protected]. Ask for a printed copy of this brochure at your next meeting.

For general information only; not tax or legal advice. TFSA limits and rules are set by the Government of Canada and can change. We’ll review the details that apply to you together.