Who doesn’t like free stuff? We do! And even though there have been some changes to the Tax Free Savings Account (TFSA) rules, the net effect is that the government has set up a program that results in some free stuff for your benefit.
TSFA | Tax-Free Savings Account
One of the more recent registered accounts that the Canadian Government has created to encourage saving is the TFSA or Tax Free Savings Account.
Unlike the RRSP account, there is no tax benefit to making a contribution to a TFSA. However, similar to an RRSP, investment gains inside the account are not taxable.
The most significant difference in favour of a TFSA is that funds withdrawn from these accounts is not taxable. Therefore, they can represent benefit to a long term investment plan, where capital gains may accrue over time.
At Campbell Lee & Ross Investment Management, where we believe in a harmonized approach to all of your investment accounts, TFSA’s can represent a powerful tool in a comprehensive investment plan.
Whether you are planning for retirement, saving for an income or holiday property, TFSA accounts can help your funds grow more quickly by avoiding the taxes on your investment gains.
Talk to one of our portfolio managers about the limits on investing in TFSA’s and how an investment strategy for this type of registered account find into your long term plans.
Tips About TFSAs
There are a number of considerations to look at when choosing to deciding between an RRSP vs TFSA investment.
A common question is whether an individual should maximize their RRSP or TFSA contribution.