Maxed TFSA Analytics

Maxed TFSA Analytics

This site is a handy analytics tool for the Canadian TFSA (Tax-Free Savings Account) enthusiast who religiously contributes the maximum allowable amount every January 1st. The charts here show how TFSAs that are maxed out every January 1st would grow if they were to track the S&P500 Total Return Index

S&P 500 Total Return Results

If a TFSA was maxed every January 1st since it should be worth $ as of , provided that it tracked the SP500 Total Return Index. This represents an annualized rate of return of about .

Compare your TFSA return to the "maxed" SP500TR TFSA

I have been maxing out my TFSA ever since I was eligible to do so, starting January 1st of the year

AND

My current total (across all accounts) TFSA valuation is

Observations

Note that the "total return" implies that dividends are continiously reinvested and that tracking this index even in an low cost ETF without error (fees) is theoretically impossible. The chart above is an exercise in comparison/visualization only and only applies when you make maximum contributions every January 1st (clearly your return was not linear!). Most "indexers" would agree with the statement that if your total TFSA valuation is within a few percents of the S&P500TR TFSA, then you've done really well! If your TFSA exceeds this amount and you made little to no effort in beating the S&P500 then congratulate yourself!

Remember that a maxed out TFSA tracking the S&P500 will never have the same "exact" growth as the S&P500. This is because the first contribution starts tracking the S&P500 on January 1st of that year. The next contribution will track the S&P from that next year onwards and so on. The return will be a weighted tracking of the S&P500 total return index with heavy weighting towards the earlier years of your contribution.

The charts look similar to a "step function" and that is simply because every Janauary 1st there is a big infusion of funds (maxing the TFSA or using all the contribution room) causing a vertical bump in the value of the TFSA. The rest of the year the remaining amount tracks the SP500TR index causing a gradual slope. This bump is very clearly visible for the year 2015 where the Harper government increased the TFSA contribution limit to $10,000 for one year. You'll also note that for 2016 the impact of the contributions was muted because of the significant decline in the SP500 from December 2015 to January 2016. Luckily the SP500 had shot back up by late April 2016.

So what's the point?

Nothing really. This is just a tool for people to compare and use over time to check their returns against a well known benchmark. I made this tool while learning new web technologies (ASP MVC 6 / MEAN stack). See FAQ for more details, methodology and my data sources.

Disclaimer and Credits

I take no responsibiltiy and/or liability for any use of the information on this website. There may be significant errors in the data and bugs in the logic used to compute returns. You can download data files from this website and are free to re-use them as you wish. For credits see the FAQ.


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