Mylo – Why it pays to invest in a TFSA
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Why It Pays to Invest In A TFSA
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The objective of this model is to demonstrate the average tax benefit
of consistently saving into a TFSA account vs. a non-registered investment account.
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Several assumptions drive this model:
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1. Saving begins at 25 years old and continues consistently until 65 years old.
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2. The investment will achieve a 5% annual interest rate.
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3. The investor will put aside $5,000 each year for the duration of the model.
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4. The marginal tax rate is 32.15%, as determined using the average income
of Canadians in this age range*, and the average marginal tax rate of all provinces**.
*Source
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5. The TFSA program will continue to be offered during the entire period.
**Source
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Open a TFSA for your financial goal now
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Investment Rate of Return
Marginal Tax RateBenefit of TFSA vs. non-registered account
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5.00%32.15%48.36%
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AgeAnnual ContributionAnnual Net TFSA Return
Annual Net Non-Registered Return
TFSA BalanceNon-TFSA BalanceDifference (+/-%)
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25$5,000$250$170$5,250$5,1701.55%
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26$5,000$263$175$10,513$10,3451.62%
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27$5,000$526$351$16,038$15,6962.18%
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28$5,000$802$532$21,840$21,2282.88%
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29$5,000$1,092$720$27,932$26,9493.65%
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30$5,000$1,397$914$34,329$32,8634.46%
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31$5,000$1,716$1,115$41,045$38,9785.30%
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32$5,000$2,052$1,322$48,097$45,3006.17%
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33$5,000$2,405$1,537$55,502$51,8377.07%
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34$5,000$2,775$1,759$63,277$58,5957.99%
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35$5,000$3,164$1,988$71,441$65,5838.93%
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36$5,000$3,572$2,225$80,013$72,8089.90%
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37$5,000$4,001$2,470$89,014$80,27810.88%
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38$5,000$4,451$2,723$98,465$88,00211.89%
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39$5,000$4,923$2,985$108,388$95,98712.92%
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40$5,000$5,419$3,256$118,807$104,24313.97%
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41$5,000$5,940$3,536$129,748$112,78015.04%
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42$5,000$6,487$3,826$141,235$121,60616.14%
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43$5,000$7,062$4,125$153,297$130,73117.26%
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44$5,000$7,665$4,435$165,962$140,16718.40%
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45$5,000$8,298$4,755$179,260$149,92219.57%
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46$5,000$8,963$5,086$193,223$160,00820.76%
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47$5,000$9,661$5,428$207,884$170,43621.97%
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48$5,000$10,394$5,782$223,278$181,21823.21%
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49$5,000$11,164$6,148$239,442$192,36624.47%
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50$5,000$11,972$6,526$256,414$203,89225.76%
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51$5,000$12,821$6,917$274,235$215,80927.07%
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52$5,000$13,712$7,321$292,946$228,13028.41%
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53$5,000$14,647$7,739$312,594$240,87029.78%
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54$5,000$15,630$8,171$333,223$254,04131.17%
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55$5,000$16,661$8,618$354,884$267,65932.59%
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56$5,000$17,744$9,080$377,629$281,74034.03%
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57$5,000$18,881$9,558$401,510$296,29835.51%
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58$5,000$20,076$10,052$426,586$311,35037.01%
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59$5,000$21,329$10,563$452,915$326,91238.54%
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60$5,000$22,646$11,090$480,561$343,00340.10%
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61$5,000$24,028$11,636$509,589$359,63941.69%
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62$5,000$25,479$12,201$540,068$376,84043.32%
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63$5,000$27,003$12,784$572,071$394,62444.97%
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64$5,000$28,604$13,388$605,675$413,01246.65%
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65$5,000$30,284$14,011$640,959$432,02348.36%
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Total after 40 years$205,000$435,959$227,023$640,959$432,02348.36%
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Open a TFSA for your financial goal now
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