TFSA BASICS
TFSAs are for Everyone (Including You!)
When researching the various savings vehicles available in the marketplace, the dizzying number of options available can leave your head spinning. You may be surprised to learn that saving can truly be as easy as 1-2-3, especially with a helpful savings tool known as a Tax-Free Savings Account (TFSA). If you’ve heard of this term (and even if you haven’t), you may have been given the impression that TFSAs are only for specific life stages or goals – but this typically isn’t the case! TFSAs can be a wise investment option for many different reasons. Let us show you how.
1. A Little Introduction
The Government’s TFSA program began in 2009 and was designed to help Canadian adults (ages 18+) to set money aside tax-free at any point throughout their lifetime. What is unique about TFSAs is that the investment income you earn (including capital gains and dividends) is not taxed in most cases, even when withdrawn. Contributions to a TFSA are not deductible for income tax purposes, which sets TFSAs apart from other savings products such as Registered Retirement Savings Plans (RRSPs). Each year, the Government sets the annual contribution limit that can be placed into a TFSA, and unused contribution room can be accumulated and carried forward for investment in future years.
2. Who benefits from a TFSA?
The simplest answer is you do! If you are over the age of 18, a TFSA is a wise choice to help you start saving for your medium or long-term savings goals. TFSAs can be used for anything, from saving up for a dream car to collecting funds for a renovation. If you have big dreams on the horizon, a TFSA can help you get there – and since TFSAs have no mandatory withdrawals, your savings can keep accumulating throughout your lifetime. So, whether you are a young adult looking to save up for the future while working at a new job, or at a later stage of your life and are hoping to bring some big savings dreams a reality, a TFSA may be just what you need
3. How to Get Started
At Tandia, we are with you every step of the way – and we want to demystify the savings process! Whether you’re a newbie or a seasoned pro, we’d be happy to have a chat with you about why a TFSA may be your ticket to a bright, secure future. Get in touch with us – we’re always happy to help!
