Taxes are one of the biggest barriers to building your wealth. We’re here to share good news because your tax-free savings account (TFSA) just got a bit more generous. Here’s the latest update, plus some additional helpful details:
Starting in 2019, you can contribute $6,000 per year to your TFSA. That’s $500 more than 2018. Hopefully the feds will continue to raise the TFSA limit to reflect the rising cost of living and the need to increase our savings along with it.
Topping up your TFSA with an extra $500 per year can make a big difference. For example, if you’re 30 today, you could retire with $60,000 more than someone who didn’t top-up.
If you’ve never contributed to your TFSA before, you’re in luck because your contribution room never expires. As of January 1, 2019, you’ll be able to put up to $63,500 into your TFSA (if you were at least 18 years of age in 2009).
One of the great things about a TFSA is that, when you take money out, you get the contribution room back. So if you withdraw $1,000 this year, you’ll be able to put that $1,000 back in the future. RRSPs don’t have this feature. Here’s a little bit more on the RRSP vs TFSA debate.
Yes! No strings attached. When you contribute to your TFSA, you can invest your money in stocks, bonds, mutual funds, ETFs and more. Your original investment plus whatever money you make – whether it’s interest, dividends, or capital gains – can be withdrawn and there is never any tax payable.
Planswell automatically adapts to changes in tax rules, interest rates and the economy. Plus, you have access to free, personalized advice from our salaried experts. If you want to discuss how to make the most of the new TFSA limit, schedule a free chat today.