Keep using TFSAs in retirement

TFSAs will never trigger the clawback of OAS

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From the April 2015 issue of the magazine.

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(Getty Images)

(Getty Images)

Unlike RRSPs, you can keep contributing to TFSAs well past 71. And unlike RRIFs, there are no forced annual withdrawals. Each member of a senior couple can invest $5,500 into his or her TFSA annually, meaning the two of you can convert $11,000 worth of RRIF withdrawals and non-registered savings into TFSAs each year. Sure, you’ve got to pay taxes when you cash out a RRIF, but once you place that income inside your TFSA you can generate dividend or interest income (or capital gains) free of tax. And no matter how large they become, the TFSAs will never trigger the clawback of government means-tested programs like OAS or the Guaranteed Income Supplement (GIS).

» TFSA loophole: How the rich can tap into GIS

Tax savings: Likely, hundreds of dollars a year in taxes on your investment returns.

 

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