No matter what your political leanings, this year’s federal election has shown there’s one thing the majority of Canadians agree on: you don’t want to see the new $10,000 Tax-Free Savings Account contribution room limit rolled back to $5,500. These are the findings from an Angus Reid survey, which found that 67% of Canadians aren’t in favour of any political party reversing the increase. So what would losing an additional $4,500 a year of extra tax-sheltered savings room in a TFSA cost high-income earners over a lifetime of investing? Plenty, as you can see below.
Assumptions: We’ve assumed 5% equity returns and a combined federal and provincial tax rate of 50%.