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2024 TFSA Contribution Limit

Jake - Author/Founder

Hi. I'm Jake, a frugal Canadian Engineer. I believe you can build a great life through frugal living and index investing.

The TFSA limit for 2024 has been announced!

The 2023 limit was set at $6,500, up from $6,000 in 2022. This 8.3% increase was needed, as cumulative inflation was 14% between 2019 and 2022 … the last time TFSA room increased. 

The 2024 limit was announced to be $7,000 – another $500 bump. Effective January 1st, 2024, you will have another $7,000 of TFSA room.

It looks like inflation will run at 3% in 2023 based on the Oct 2023 CPI Report. Therefore, I can’t complain about the 7.7% increase in TFSA room. 

Let’s see how the 2024 limit impacts your lifetime TFSA Room. In addition, I’ll cover a realistic example of how to compound that TFSA to become a multi-million dollar tax-free income generating machine. After all, the TFSA has maximum value as an investing account, not as a savings account. 

Your Total TFSA Room

The TFSA was born in 2009. The annual room accumulates over time, even if you don’t contribute anything, starting when you turn 18. You don’t lose contribution room. 

You’ll have $95,000 of lifetime TFSA room in 2024 if you were born before 1991. That’s a lot of room for tax-free growth. 

Find your exact lifetime TFSA room with my Google Sheets TFSA Contribution Room Calculator. 

The spreadsheet also models future TFSA growth, assuming you invest in a global index fund like (XEQT, ZEQT or VEQT) and do nothing else. Returns are based on the last 123 years of global stock returns – 8% per year, or 5.2% when inflation-adjusted (source).

How To Find TFSA Room

The easiest way to track TFSA room is through your CRA MyAccount. You can see your TFSA room at the start of 2023; then it’s up to you to monitor contributions within the year. I caution against relying only on the CRA. It’s best to keep records yourself in case banks report incorrectly. 

One problem with CRA My Account: Your 2024 room won’t be displayed immediately in January 2024. Therefore, you must calculate room yourself using the TFSA Room Calculator. 

2024 room = (Room at Start of 2023) – (Contributions in 2023) + (Withdrawals in 2023) + $7,000. 

For the equation above, find your “room at start of 2023” in your CRA My Account. 

TFSA Compounding Example

Consider Fred who turned 30 in 2023 and had maxed his TFSA since turning 18 in 2011. Fred contributes to the TFSA every January and invests it in a globally diverse index fund like XEQT. 

Fred does not think about his TFSA for the rest of his year. Instead, he spends his energy working out, spending time with family and to learning new things to increase his income. 

Graph of TFSA Contributions vs Growth

Fred contributed $78,000 to his TFSA over the past 12 years, and his TFSA value will be $135,000 in 2023. The investment growth includes the last two years of flat (zero) stock market returns (which is to be expected). 

By age 60, Fred expects his TFSA to be over $3,000,000, assuming the annual TFSA room keeps up with inflation and that stock returns average 8%, just like the last 123 years. 

Based on a 3% safe withdrawal rate, Fred expects to draw $90,000 of tax free money every year from his TFSA, starting at age 60. 

More TFSA Learnings