Why you should top up your TFSA

Over 30 years, even a 1% tax savings makes a huge impact

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by

From the January 2016 issue of the magazine.

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It’s not uncommon for people with unused space in their tax-free savings account or RRSP room to hold non-registered investments simultaneously. While you could make a case for not maxing out your RRSP, it’s tough to justify leaving room in your TFSA if you have the savings available. (One exception might be if you have non-registered investments with accrued capital gains that will trigger a large tax liability if you sell or transfer the investments.) Here’s what could happen if you move your non-registered savings into a TFSA and limit the amount of taxable income you’re earning.

$10,000 in a TFSA would grow to $43,219 over 30 years

 


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5 comments on “Why you should top up your TFSA

  1. Where on earth can I get 5% on a TFSA ?
    Hard to take this article seriously.

    Reply

    • You need to seek advice

      Reply

    • Anywhere except from a bank!

      Reply

  2. What financial institution is giving a steady, guaranteed 5% on a TFSA? One is lucky to receive a full 1% on a TFSA at the moment! Please do not insult your subscribers’ intelligence with these type of articles. If there is a steady 5% option, why was it not named in this article?

    Reply

    • See an advisor that is not a bank. Banks tend to sell you on a savings account and most people think that is all they can get with a TFSA due to the name given to this savings method by the government. You can actually own a whole host of different investments in your TFSA.

      This is just like people talking about RRSPs generically. I have heard people saying RRSPs are a terrible investment, but when I ask them what they actually hold as a portfolio inside their RRSPs they are unable to tell me. They are confusing the investment vehicle name with what it is holding.

      CD

      Reply

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