Episode 55: TFSA in 2026: The Most Underused Retirement Tool

Published February 16, 2026

The TFSA is often thought of as a savings account — but in retirement, it can be much more than that.
In this Money Monday episode, Darren Devine, Financial Planner with Sun Life and President of Devine & Associates, explains why the TFSA remains one of the most underused — and misunderstood — retirement tools.

This episode explores how TFSAs can:

→ Provide tax-free flexibility in retirement

→ Help manage taxable income year to year

→ Support spending needs without affecting government benefits

→ Work alongside RRSPs and RRIFs as part of a coordinated plan

When used intentionally, a TFSA isn’t just a place to save — it’s a powerful planning tool that can help reduce surprises and increase flexibility throughout retirement.

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Related Money Monday Episodes

If you’re rethinking how your TFSA fits into retirement, these Money Monday episodes may also be helpful.

Episode 26: RRIF Rules You Should Know
→ Helps connect TFSA flexibility with taxable RRIF withdrawals and overall retirement income strategy.

Episode 27: Does Your Investment Strategy Match Your Life Stage?

→ Supports the idea that TFSAs should evolve with your stage of life, not just sit unused.

Episode 52: Do You Have a Written Plan — or Just Good Intentions?

→ Reinforces that tools like the TFSA are most powerful when coordinated within a written retirement plan.

Episode 53: 3 Tax Moves Retirees Should Consider Before Filing

→Pairs naturally with TFSA strategy, especially when managing taxable income in retirement.

Episode 29: Keys to a Successful and Secure Retirement

→ Provides broader retirement context, showing how TFSAs fit alongside pensions, RRIFs, and other income sources.

Darren Devine, CFP®, CLU®

Financial Planner, Sun Life
President of Devine and Associates Financial Services Inc.

For many Canadians, the TFSA is actually more powerful than their RRSP in retirement—but only if you use it.

Hello, and welcome to Money Monday, where we help simplify your financial journey.
I'm Darren Devine, Financial Planner with Sun Life and President of Devine & Associates. I’ve been helping families across Ontario build and protect their retirement for over 20 years.

Let’s talk about one of the most underused tools in retirement: the Tax-Free Savings Account.
Despite the name, a TFSA isn’t just a savings account. It’s a tax-free investment account—your money can grow, earn interest, dividends, or capital gains, and you can withdraw it later without paying tax on those withdrawals.

By 2026, if you’ve been 18+ and a Canadian resident since TFSAs began in 2009 and never contributed, you’ll have $109,000 of total contribution room, with the annual limit holding at $7,000 in 2024–2026.

Here’s why that matters in retirement:

Withdrawals don’t show up as taxable income. Unlike RRIF or pension withdrawals, TFSA income and withdrawals don’t go on your tax return.
That means they don’t affect income-tested benefits like OAS or GIS (Guaranteed Income Supplement)—huge if you’re trying to keep those benefits intact.

So how can retirees use a TFSA?

As a “lumpy expense” fund: roof repairs, a newer car, helping kids, big trips—things that don’t happen every month. Paying for those from a TFSA instead of a taxable withdrawal can help keep your overall tax bill and benefit clawbacks lower.
To gradually move non-registered investments into a more tax-efficient place. Each year, you can shift a bit more into the TFSA, so future growth and withdrawals are tax free.

And what about RRSP vs TFSA going forward?

Very simple rule of thumb:

If you’re in a higher tax bracket today than you expect to be in retirement, RRSPs often make sense for the deduction now.
If you’re in a lower or similar bracket, or you’re already retired, new savings often belong in the TFSA, because withdrawals are flexible and don’t affect your benefits.

You don’t have to use every feature perfectly. But if you’re retired—or close—and your TFSA is sitting empty or just holding a small cash balance, you may be leaving a lot of long-term tax savings on the table.

If you’re unsure how a TFSA should fit into your retirement income plan for 2026 and beyond, that’s exactly the kind of planning we can walk through together.

Thanks for tuning into Money Monday. Don’t forget to like and comment for more episodes filled with tips to help make your financial journey a breeze. Until next time, I'm Darren Devine, and you can always talk to us today at DevineAndAssociates.ca!

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