Contribute the full $7,000 annual TFSA room every year, earn 7 percent, and let it run for 30 years. Treated as an annuity, the stream of deposits compounds to about $661,226 by year 30. Over that period you contribute $210,000 of your own money (30 years at $7,000), so the remaining $451,226 is investment growth. The defining feature of the TFSA is that none of that growth is ever taxed. There is no tax on the interest, dividends, or capital gains inside the account, and withdrawals are completely tax-free and do not count as income. Compared with a taxable account at the same return, the tax shelter is worth tens of thousands of dollars over a multi-decade horizon.
How it is calculated
The projection uses the future-value-of-an-annuity formula, contribution times ((1 plus r) to the power n, minus 1) divided by r, where r is the annual return and n is the number of years. Each year’s deposit earns compounding returns for every remaining year, which is why later growth dwarfs the contributions. The annual contribution is capped at your available room, which for 2026 is $7,000; a Canadian resident who has been eligible since 2009 has roughly $102,000 of cumulative room. Unused room carries forward indefinitely, and any amount you withdraw is added back to your room the following calendar year. Because all growth and withdrawals are tax-free, the TFSA tends to win over an RRSP when your tax rate today is similar to or lower than your expected rate in retirement.
Frequently asked questions
TFSA cumulative room since 2009?
For Canadian residents aged 18+ since 2009, total cumulative TFSA room as of 2026 is approximately $102,000. Unused room carries forward; withdrawals add back to room the following year.
What is the TFSA contribution limit for 2026?
The annual TFSA dollar limit for 2026 is $7,000, the same as 2024 and 2025. The CRA indexes this limit to inflation in $500 increments, so it can increase in future years. You can check your personal available room through your CRA My Account.
Are TFSA withdrawals taxed?
No. Withdrawals from a TFSA are completely tax-free and do not count as income for any federal or provincial purpose. They do not affect income-tested benefits such as OAS, GIS, or the GST/HST credit. The withdrawn amount is added back to your contribution room on January 1 of the following calendar year.
Can a non-resident of Canada contribute to a TFSA?
A non-resident who holds a valid SIN can technically open a TFSA, but any contributions made while a non-resident are subject to a 1 percent per month penalty tax for each month the contributions remain in the account. It is generally advisable to stop contributing upon becoming a non-resident and resume only after re-establishing Canadian residency.