Tax-free Savings Account

Thanks to your interest and terrific questions on the use of a Tax-Free Savings Account (TFSA). This helps all retirees improve and understand the flexibility of a TFSA! Let’s get into it further here…

What clients are asking about Tax-Free Savings Accounts (TFSAs):

1. Some clients weren’t aware that you could hold TFSAs in different institutions. Such as; banks, insurance companies and stock brokers. You can transfer from one institution to another.
   
2. Other clients did not realize that they could hold a diversified portfolio within their TFSA. Such as GICs, stocks, exchange traded funds and segregated funds.
   
3. Why the increased limit from $5,000 in 2009 to $7,000 in 2024. This is because the government allowed you to make you annual contribution which would be indexed to inflation (click to read more) which in 2024 was approx. 4.7%.
   
4. Some students inquired what does it mean to have designated beneficiaries? So, this could be husband to wife or designated family members. This could also be used as a legacy account to pass some of your assets to family members tax-free similar to a life insurance plan. With no medical.
   
5. Clients were asking what the age limit was for contribution and if it was similar to an RRSP. Answer is there is no age limit on a TFSA where an RSP age limit is 71.
   
6. Some clients were wondering about deposits: YES, you can add monthly deposits to a TFSA as well as lump sums.

It’s rare when Canadians can avoid the tax man!

Examples of how retirees have used the profit from their TFSAs:

1. To maximize their investment growth.
   
2. Cash gifts to grandkids: Tax-Free for Birthdays or Grads.
   
3. One client took some extra profit for income to offset monthly lifestyle costs.
   
4. One client took a larger amount of money for appliances Tax-Free in 2023 and now in 2024 they bought their annual amount of $7,000 and are able to replace what they spent last year. Good way to cut down on taxable interest on your taxes.
   
5. Other clients looked into the First Home Savings Account (FHSA) (click to read more) – a new program from the Canadian government. This will help their grandkids buy their first home: You can deposit up to $40,000 over 8 years. Tax-Free deposits and tax-deductible deposits!!
   
6. One client upgraded her trip to California flying first class – Have a great trip Bonnie!💗

There were some big returns last year
and there are no capital gains within the Tax-Free Savings Account

Thank you for your responses – love the questions!

This helps all retirees improve and understand the flexibility of a Tax-Free Savings Account (TFSA).

Ted’s library continues to analyze revolutionary longevity concepts – and will share them with you! Ted doesn’t need to be the Sage on the Stage but he wants to be your Guide on the Side! (Quote from The Longevity Revolution click here if you’re curious).