{"id":184,"date":"2017-06-23T16:39:47","date_gmt":"2017-06-23T23:39:47","guid":{"rendered":"https:\/\/mgfadvisory.ca\/news\/?p=184"},"modified":"2018-08-22T16:40:32","modified_gmt":"2018-08-22T23:40:32","slug":"what-is-a-tfsa-how-can-it-help-me","status":"publish","type":"post","link":"https:\/\/mgfadvisory.ca\/news\/2017\/06\/23\/what-is-a-tfsa-how-can-it-help-me\/","title":{"rendered":"What is a TFSA & How Can it Help Me?"},"content":{"rendered":"

What would you do with all your hard-earned money if you never had to fork any of it over to the tax man?<\/span><\/p>\n

Go on a trip?<\/span><\/p>\n

Buy a car?<\/span><\/p>\n

Perhaps something more practical, such as re-investing in a fund for your children\u2019s post secondary education?<\/span><\/p>\n

The possibilities are endless, but from our perspective it\u2019s still important for people to understand why they\u2019re taxed in the first place. Sure, we all want to hold on to as much of our earnings as possible, but we also live in an area of the world with developed infrastructure, public schools, roads, garbage collection, and so much more. <\/span><\/p>\n

Taxes are necessary. They\u2019re important. <\/span><\/p>\n

That doesn\u2019t mean there aren\u2019t ways to preserve your savings. <\/span><\/p>\n

The Government Wants You to Save Money<\/b><\/span><\/p>\n

I know, it sounds surprising, doesn\u2019t it? The truth is that if more Canadians are saving their money in Tax Free Savings Accounts, then that means there\u2019s going to be money contributed back into the economy in the future. <\/span><\/p>\n

Neat, right? It\u2019s a win-win situation \u2013 you\u2019ve got a growing account waiting for you until you\u2019re ready, and the government knows you\u2019ll spend that money eventually on houses or cars or education, which means further development of infrastructure and other institutions. <\/span><\/p>\n

But this blog isn\u2019t for the government \u2013 it\u2019s for you, the people!<\/span><\/p>\n

Benefits of a Tax Free Savings Account<\/b><\/span><\/h3>\n

1. Tax Exempt<\/b><\/span><\/p>\n

The biggest and most well-known benefit of a TFSA is the fact investment income, capital gains, and dividends are exempt from taxation within a TFSA. That means you can invest and withdraw without paying taxes on your money. Contributions you make over time are not taxed, so you can continue growing your TFSA the longer you hold it. <\/span><\/p>\n

2. Cash Free Options<\/b><\/span><\/p>\n

Another key TFSA fact is you don\u2019t actually have to use it as a cash savings account. We work with lots of our clients to find investments they can purchase directly through their TFSA. So not only are you dipping into the investment market, but the returns you enjoy are free from taxes as well! You can buy mutual funds, bonds, GIC\u2019s, or other products that we can help you with. <\/span><\/p>\n

3. No Time Requirements<\/b><\/span><\/p>\n

There are plenty of investment options out there that require you to keep your money in your account for a set amount of time. Whether it\u2019s a year, 5 years, 10 years \u2013 there are types of accounts designed to build steadily over the long haul, and they\u2019re great at what they do. The difference with a TFSA is it might not grow as quickly, but you can access it at any time. <\/span><\/p>\n

So far, so good!<\/span><\/p>\n

What\u2019s the Catch? <\/b><\/span><\/h3>\n

So we should all just put our entire life savings into TFSA\u2019s, right? Sure, but if we all did that then the entire system would probably collapse. <\/span><\/p>\n

To prevent people from gaming the system and causing problems, the maximum annual contribution limit is $10,000, which is up big time from $5500 prior to 2015 and $5000 prior to 2013.<\/span><\/p>\n

So when January 1st of 2017 rolled around, the maximum an individual could have contributed to their TFSA since the program was created was $52,000.<\/span><\/p>\n

Oh, you also have to be over 18 years of age and a Canadian resident for every eligible year. <\/span><\/p>\n

Not bad, right? TFSA\u2019s are a great option to keep your investments flexible. We always recommend diversifying your portfolio, and a TFSA is a handy way to help with that.<\/span><\/p>\n

Need some advice on your TFSA? Give me a call!<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"What would you do with all your hard-earned money if you never had to fork any of it over to the tax man? Go on a trip? Buy a car? Perhaps something more practical, such as re-investing in a fund for your children\u2019s post secondary education? The possibilities are endless, but from our perspective it\u2019s…

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