Grow Your Money Tax Free With Tax Free Saving Account

Understanding Tax Free Saving Account :

A Tax-Free Savings Account (TFSA) is a personal savings account that can be used to save for any goal. After-tax money can go into a TFSA, but your investments grow tax-free and you won’t pay any tax on withdrawal.

Who should invest in a TFSA?

Canadians who have reached the age of majority
Great for short term, medium-term, and long-term savings
Best suited for low to medium-income earners or as a complement to an RRSP

A TFSA is an excellent retirement savings option for those seeking additional income or anticipating a higher tax bracket upon retirement. A TFSA, unlike an RSP, does not require conversion to an income product at age 71. This makes it an excellent choice for seniors seeking tax-free savings throughout their retirement. Income from a TFSA does not affect eligibility for OAS, GIS, GST credit, or other income-tested benefits and tax credits.

Tax-free means more savings

When you invest in a TFSA, your earnings are completely tax-free.
This enables you to save more and achieve your goals faster.
Making a $200 TFSA contribution per month for 20 years would result in a total of $48,000 in contributions and $43,116 in tax-free growth.
Investing in a TFSA can save you $10,926 over a non-registered account, where all investment income is taxable.**

How much can I contribute to a TFSA?

Canadian residents over 18 can contribute up to $7,000* per year in their TFSA, in addition to any unused contribution room. TFSAs accept after-tax deposits and allow for tax-free withdrawals at any time. After a withdrawal, contribution room is recovered in the next year.

TFSA Benefits Includes:

Earn investment income, tax-free

Interest, capital gains, dividends you earn in the account are not subject to tax

Flexibility to withdraw from TFSA

Withdrawals are tax-free and can be at any time, for any purpose that you choose

Flexible savings plan

Any unused contribution room in TFSA can be carried forward. Any withdrawals from a TFSA in one year, can be recontributed in the next calendar year

Government benefits stay the same

Withdrawing from a TFSA and receiving any amount will not affect the government benefits you get (ex. Child tax benefit, GIS, etc.)