Committed to providing solutions for your future needs.

VirtualSage™ - Start Your Plan


(877) 422-6346 x 224


Show all articles

Posts

Personal Wealth and Finance


Advantages of the Tax-Free Savings Account (TFSA)

April 1, 2021

There are basic uses for the Tax-Free Savings Account (TFSA) for investment planning purposes. Some may have advantages for your planning:

  • Retirement planning. TFSAs can benefit individuals who are looking to invest in their retirement but are unable to contribute to RRSPs for various reasons. Unlike the Retirement Savings Plan (RRSP) the TFSA will not be taxed when monies are withdrawn. Talk to your advisor about contributions allowed and updating legislation info.

Annual TSFA Limits TFSA contribution investment room per year, per person over the age of 18:

  • 2009 to 2012: $5,000
  • 2013 and 2014: $5,500
  • 2015: $10,000
  • 2016 to 2018: $5,500
  • 2019 to 2021: $6,000

If a TFSA has not been yet used, your cumulative investment room is $75,500 per person. Contributions are not deductible from your taxable income, thus it is a good place to invest an inheritance.

  • Education planning. Both the traditional Registered Education Savings Plan (RESP) and the TFSA can be used as an educational savings vehicle. A TFSA offers parents another tax-efficient method for this investing.
  • Income splitting with spouses and children (over 18). TFSAs go beyond normal attribution rules, which offer income splitting to high-income spouses and partners and children over 18 years old.
  • Estate planning. Individuals can name surviving spouses and partners as successor account holders, ensuring the tax-free status of a TFSA will continue after death.

 

Source: CRA

 

Publisher's Copyright & Legal Use Disclaimer Replication is prohibited beyond the use of this website. The publisher does not guarantee the accuracy and will not be held liable in any way for any error, or omission, or any financial decision or purchase or use of a financial product, including investment or insurance products, and suggest that a professional advisor's counsel is sought, especially with regard to Segregated Funds and Investment Funds which have investment risks as noted in the Fund Disclaimer. All rights reserved by Adviceon®

Disclaimer The particulars contained herein were obtained from sources which we believe are reliable, but are not guaranteed by us and may be incomplete. This website is not deemed to be used as a solicitation in a jurisdiction where this representative is not registered. This content is not intended to provide specific personalized advice, including, without limitation, investment, insurance, financial, legal, accounting or tax advice; and any reference to facts and data provided are from various sources believed to be reliable, but we cannot guarantee they are complete or accurate; and it is intended primarily for Canadian residents only, and the information contained herein is subject to change without notice. References in this Web site to third party goods or services should not be regarded as an endorsement, offer or solicitation of these or any goods or services. Always consult an appropriate professional regarding your particular circumstances before making any financial decision.

Commissions, trailing commissions, management fees and expenses all may be associated with investment funds, including segregated fund investments. Please read the fund summary information folder prospectus before investing. Investment Funds and/or Segregated Funds may not be guaranteed, their market value changes daily and past performance is not indicative of future results. The publisher does not guarantee the accuracy and will not be held liable in any way for any error, or omission, or any financial decision. Talk to your advisor before making any financial decision. A description of the key features of the applicable individual variable annuity contract or segregated fund is contained in the Information Folder. Any amount that is allocated to a segregated fund is invested at the risk of the contract holder and may increase or decrease in value. Product features are subject to change.


Newsletter tags