A Tax-Free Savings Account (TFSA) is a Canadian registered account where contributions are after-tax but ALL growth and withdrawals are 100% tax-free. Project the tax-free balance from your contribution schedule.
Quick answer. A Tax-Free Savings Account (TFSA) is a Canadian registered account where contributions are after-tax but ALL growth and withdrawals are 100% tax-free. Project the tax-free balance from your contribution schedule.
Interactive calculator
TFSA calculator (Canada)
Canadian Tax-Free Savings Account: contributions grow tax-free.
Projected balance-
Total contributed-
Growth-
Lifetime tax savings (estimated)-
How is this calculated?
FV = balance * (1+r)^t + PMT * ((1+r)^t - 1) / r
Tax savings approximates the value of either (a) up-front deductions (Traditional / RRSP / FHSA) or (b) tax-free growth (Roth / TFSA / ISA) relative to a taxable account.
About this tool
The TFSA calculator projects the tax free balance you can accumulate inside a Tax Free Savings Account, the Canadian registered account where contributions are made with after tax dollars but every dollar of growth and withdrawal is permanently exempt from income tax. For 2026 the annual contribution room is 7,000 CAD, and the cumulative lifetime limit for anyone who turned 18 in 2009 is 102,500 CAD.
Unlike the RRSP, contributions are not deductible against current income, so the TFSA is most valuable when your marginal tax rate today is lower than your expected retirement rate, or when you simply want flexible tax free growth on a horizon shorter than retirement. Withdrawals do not affect Old Age Security clawback, the GST/HST credit, or the Canada Child Benefit, which makes the TFSA the cleanest accumulator account in the Canadian system.
B0 = starting balance in the TFSA on day one of the projection.
PMT = annual contribution, capped at 7,000 CAD in 2026 plus any carried forward room.
r = expected annual real return after inflation, typically 5 to 7 percent for a stock heavy portfolio.
n = number of years contributing.
Tax saved = the value of tax free growth vs the same portfolio held in a taxable non registered account.
Worked example
A 35 year old Ontario resident has 15,000 CAD in their TFSA, contributes the full 7,000 CAD per year for 30 years, earns a 6 percent annual real return, and faces a 30 percent marginal rate. Here is the 2026 calculation step by step:
Starting balance: 15,000 CAD.
Annual contribution: 7,000 CAD, indexed in future years but held constant here for simplicity.
Growth on the starting balance: 15,000 x (1.06)^30 = 86,127 CAD.
Growth on the annuity stream: 7,000 x ((1.06^30 - 1) / 0.06) = 553,386 CAD.
Vs RRSP equivalent (same contributions, 30 percent withdrawal tax): 639,513 x 0.70 = 447,659 CAD net.
Result: The same dollars in a TFSA deliver 191,854 CAD more to spend in retirement than an RRSP withdrawn at a 30 percent rate, because no withdrawal tax applies. If the saver expects a 20 percent retirement bracket instead, the RRSP wins on after tax dollars and the TFSA becomes the secondary account.
2026 TFSA room by age cohort
TFSA room accrues from the year you turned 18. Anyone who was 18 or older in 2009 has the full cumulative cap. Younger Canadians have a smaller lifetime room.
Year turned 18
Cumulative TFSA room in 2026
2026 annual addition
2009 or earlier
102,500 CAD
7,000 CAD
2015
79,500 CAD
7,000 CAD
2020
47,000 CAD
7,000 CAD
2023
26,500 CAD
7,000 CAD
2026 (new 18)
7,000 CAD
7,000 CAD
Common mistakes
Day trading inside the TFSA. The CRA can reassess a high turnover TFSA as a business and tax all gains at marginal rates. Several Tax Court cases have triggered six figure assessments.
Recontributing in the same calendar year. Withdraw 20,000 CAD in March and recontribute it in November and you owe a 1 percent per month over contribution tax until withdrawn. The room comes back only on January 1.
Holding US dividend stocks. US dividends face 15 percent IRS withholding that is not recoverable inside a TFSA. Use an RRSP for US dividend ETFs; the US Canada treaty waives the withholding there.
Holding only HISA cash. A 4 percent savings account earns far less than a globally diversified ETF over 30 years and wastes the tax sheltered envelope. Use the TFSA for the highest expected return asset you hold.
Forgetting the lifetime cap. If your room shows as 102,500 CAD but you only opened the account in 2018, your real room is whatever has accrued from your 18th birthday. Verify on CRA My Account before maxing out.
Treating it like an emergency fund alone. The flexibility tempts savers to pull money out for non emergencies, locking the room out for the rest of the calendar year.
7,000 CAD per year for 2026, indexed to inflation in 500 CAD steps. The cumulative lifetime limit for anyone who turned 18 in 2009 or earlier is 102,500 CAD as of 2026. Younger Canadians accrue room only from the year they turned 18.
Are TFSA withdrawals taxed?+
No. All withdrawals (contributions and growth) are 100 percent tax free. They do not count as taxable income, do not affect Old Age Security clawback, and do not reduce GIS, GST/HST credit, or Canada Child Benefit.
Can I recontribute withdrawn TFSA amounts?+
Yes, but only in the next calendar year. If you withdraw 10,000 CAD in November 2026, that 10,000 of room is added back on January 1, 2027. Recontributing in the same calendar year creates a 1 percent per month over contribution penalty until withdrawn.
Should I hold US stocks in my TFSA?+
It depends. US dividends paid into a TFSA face a 15 percent IRS withholding tax that is not recoverable (unlike in an RRSP where the US Canada tax treaty exempts it). For pure growth stocks or Canadian dividend payers, the TFSA is fine. For US dividend ETFs, the RRSP is more tax efficient.
