TAX-FREE SAVINGS ACCOUNTS
the basics
The TFSA is entering its 10th year. Allowable contribution amounts have grown to be substantial, so now this tax-free savings and investments account is a powerful financial planning tool.
- ELIGIBILITY: If you are a Canadian resident, age 18 or older, you are entitled to contribute to a TFSA.
- CONTRIBUTION LIMITS: TFSAs have been around since 2009. If you were 18 or older in 2009 your total contribution limit is now $57,500; that’s $52,000 for previous years plus $5,500 for 2018. You don’t need to have earned income to contribute to a TFSA, and any unused contribution room can be carried forward indefinitely.
- ALLOWABLE INVESTMENTS: Just like a RRSP, most types of investments are allowed in a TFSA: Mutual Funds, Segregated Funds, ETFs, Stocks, Bonds, GICs. Investments in a TFSA grow tax-free.
- MAKING WITHDRAWALS: Withdrawals from your TFSA are tax-free and can be made at any time. If you withdraw an amount from your TFSA you can recontribute that same amount starting in the next calendar year.
- MAKING TRANSFERS: You are allowed to transfer your TFSA from one financial institution to another. While there might be a transfer out fee (ask your financial institution) there won’t be any income tax to pay. Please speak to us about this; we can transfer any TFSA over to us.
NOTEWORTHY: According to Canada Revenue Agency by 2016 nearly 17 million Canadians had opened TFSAs, but only about 10% of them have contributed their maximum allowed.
We are here for you if you would like to chat about how a TFSA fits into your savings, investments, tax, education and retirement plans. The TFSA can be a powerful tool for achieving almost any financial goal.
This memo was prepared solely by Terry and Patty Rempel who are registered representatives of FundEX (a member of the Mutual Funds Dealers Association of Canada and the MFDA Investor Protection Corporation). The views and opinions, including any recommendations, expressed in this memo are those of Terry and Patty Rempel. Bluestone Financial is a personal trade name of Terry and Patty Rempel.
