What 29 $5-Million TFSAs Tell Us About Wealth, Risk, and the Real Power of Tax-Free Investing

Not long ago, The Globe and Mail published a story that sparked a mix of disbelief and curiosity across the financial world:

“29 Canadians have TFSAs worth $5 million or more.”

Let that sink in.

If you’ve been eligible to contribute to a TFSA since the beginning in 2009, your maximum cumulative contribution room in 2025 is $102,000. That’s it.

So how did 29 people turn just over $100K of contribution room into $5 million?

At first glance, it seems like an anomaly. A loophole. Or maybe even a gimmick.

But behind the headline is a much deeper and more useful insight into how most Canadians use the TFSA wrong, and how a few use it very, very right.

First, the Math: Is This Even Possible?

Yes, but it’s rare. And incredibly difficult.

Let’s assume someone contributed the maximum TFSA amount every year since 2009, never missing a year, never withdrawing a dollar.

To grow that staggered series of contributions into $5 million by 2025 would require an average annualized return of ~38–42%, depending on how early those gains occurred.

To put that into perspective:

Investment	Avg. Annual Return (Long-Term)
S&P 500 (U.S. equities)	~10–11%
TSX Composite Index	~6–8%
Balanced Portfolio (60/40)	~5–7%
Real Estate (Canadian avg.)	~5–6%
High-Interest Savings	~1–2%

These TFSA unicorns weren’t riding index funds. They were either trading high-risk assets or investing in private businesses that exploded in value.

The CRA found that many of these $5M+ TFSA holders had:

• Bought shares in early-stage companies they were directly involved with
• Traded in small-cap or penny stocks
• Used options, derivatives, or aggressive swing trading strategies

And because those investments were made inside a TFSA, every dollar of gain was 100% tax-free and always will be.

What Most Canadians Are Actually Doing

Here’s the real contrast, and it’s stark:

• The average TFSA balance in Canada is under $40,000
• Roughly 40% of TFSA accounts are invested entirely in cash or GICs
• Only about 10–12% of Canadians max out their TFSA every year
• Many people withdraw from their TFSA without a plan, permanently losing the compounding opportunity

Most Canadians are treating the TFSA like a high-interest savings account, not a tax-advantaged investment engine.

That disconnect is what makes the $5M number so jarring. Because it’s not just about luck or risk, it’s about structure.

The TFSA: Still the Most Powerful Account in Canada

Even if you never chase 40% returns, the TFSA is still one of the most powerful financial tools Canadians have access to. And it’s especially valuable as you approach retirement.

Here’s why:

• All investment growth is tax-free capital gains, dividends, interest, and withdrawals
• Withdrawals don’t count as income, no OAS clawbacks or higher tax brackets
• Contribution room is restored, you get the full amount back the next year
• No age restrictions after 18, contribute or withdraw at any age, for life

So No, You Don’t Need $5 Million in Your TFSA…

But you do need a plan.

For most people, better financial outcomes come not from chasing higher returns, but from reducing unnecessary taxes.

A smart TFSA strategy is part of that:

• Invest growth-oriented assets, not just savings
• Leave cash outside the TFSA; use it for equities or ETFs with long-term upside
• Don’t treat it like an emergency fund, treat it like a long-term wealth engine
• Coordinate it with RRSPs, corporate accounts, CPP, OAS, pensions

Because at the end of the day, it’s not about how much your portfolio earns, it’s about how much you get to keep.

Tax Optimization Beats Market Timing

Let’s do a quick mental math check:

📈 You earn 10% annual returns in a taxable account
💸 But you lose 20–30% of that to taxes
🧮 Net return? Closer to 7%

Now imagine that same return, inside a TFSA.
Or better imagine structuring your retirement withdrawals to keep your average tax rate under 15% instead of 25–30%.

You don’t need to find the next Shopify to retire better. You just need to stop donating more than necessary to the CRA.

This Is Exactly Why We Built Optiml

Most Canadians don’t have a clear retirement or withdrawal strategy. They have:

• A TFSA they add to occasionally
• An RRSP they’ll figure out “later”
• A corporation they’re not sure how to draw from
• Government benefits they haven’t really thought about
• And real estate or inheritances they’re unsure how to plan for

What they don’t have is a system that connects all the dots and shows them how to minimize taxes while meeting their goals.

That’s what Optiml does.

We help Canadians:

• Link their investment accounts
• Factor in RRSP, TFSA, CPP, OAS, pensions, real estate, and lifestyle goals
• And generate a personalized, tax-efficient financial plan in minutes

Final Thought

The 29 Canadians with $5M TFSAs? They played a rare and risky game and won.

But that’s not your game. Yours is much more winnable and doesn’t require luck or gambling.

It requires understanding the rules.
Using the right accounts for the right assets.
And planning withdrawals as carefully as you plan contributions.

The TFSA is powerful. Used right, it could be the most valuable account in your entire retirement plan, whether it grows to $500K or $5 million.