Tax-free savings accounts (TFSAs) are a relatively recent option to Canadians’ financial planning menu, and it’s one we think could fit into many plans.
A TFSA is a flexible registered savings account that allows you to earn income in a tax-free environment. As of 2019, the annual maximum contribution is $6,000 per person. Unused contribution room is automatically added to your lifetime unused room, penalty-free.
Some ways a TFSA differs from an RRSP
- Unlike an RRSP, a TFSA uses after-tax dollars
- No tax will be payable when you withdraw funds
- Withdrawals will not affect income related government benefits such as OAS
Advantages of the Reuter Benefits TFSA
- Competitive investment management fees
- No front-end or back-end loads
- Contributions will be taken from your bank account directly into your TFSA with Manulife Financial
- Assistance at enrolment and ongoing support from Reuter Benefits staff
Who may be interested in a TFSA?
- Individuals who have utilized their full RRSP room or have little RRSP room
- Individuals concerned that their expected retirement income will reduce or eliminate income-tested government benefits
- Couples saving for a down payment on a house or their children’s post-secondary education
- Individuals or families saving for a significant purchase such as a car or a dream vacation
- Retirees over age 71 who can no longer invest in RRSP’s