5705 Cancross Court, Mississauga, ON L5R 3E9View on Map »
The Tax-Free Savings Account (TFSA) was introduced in the February 2008 Federal Budget and became available January 1, 2009. It is touted by the Government of Canada as 'the single most important personal savings vehicle since the introduction of the Registered Retirement Savings Plan (RRSP).'
The Canada Revenue Agency (CRA) draws a distinction between an RRSP and the TFSA program as, 'An RRSP is primarily intended for retirement. The TFSA is like an RRSP for everything else in your life.' The reason for this distinction is that TFSAs offers the investor the flexibility to access the funds without incurring a tax obligation upon withdrawal. As we are all aware 'life happens' and having all of our money in rigid investments can put a damper on our liquidity. This is especially true for growing families where access to emergency funds is always necessary. It's better to save those funds in a tax free account than to have your interest income eroded due to taxes.
The features of the Tax Free Savings Account:
The Tax Free Savings Account is an ideal investment for those who want to earn investment income without the tax burden as well as those who want liquidity in their savings. While the wealthy may take advantage of these savings vehicles, it is the middle class that stands to reap the most benefits. Instead of holding funds in a 'rainy day' savings account, you can increase your return through tax savings without losing flexibility. As with any investment plan there are some caveats to consider as the CRA found that some of the 4.7 million TFSA investors were confused in its application.
Questions about TFSAs?
Contact our office!
Copyright © 2011 AdvisorNet Communications Inc. All rights reserved. This article is provided for informational purposes only and is based on the perspectives and opinions of the owners and writers only. The information provided is not intended to provide specific financial advice. It is strongly recommended that the reader seek qualified professional advice before making any financial decisions based on anything discussed in this article. This article is not to be copied or republished in any format for any reason without the written permission of the AdvisorNet Communications. The publisher does not guarantee the accuracy of the information and is not liable in any way for any error or omission.
This publication and website are intended for Ontario residents only and the information contained is subject to change without notice. Mutual Funds are offered and regulated through Global Maxfin Investments Inc. (GMII). Insurance products (including Segregated Funds) and Income Tax Planning is provided under the name of Ausim Mobeen. GMII does not supervise these activities and will not be accountable, responsible or liable for such activities. This publication contains opinions of the writer and may not reflect opinions of GMII. The information contained herein was obtained from sources believed to reliable, but no representation, or warranty, express or implied, is made by the writer or GMII or any other person as to its accuracy, completeness or correctness. This publication is not an offer to sell or a solicitation of an offer to buy any of the securities. The securities discussed in this publication may not be eligible for sale in some jurisdictions. If you are not a Canadian resident, this report should not have been delivered to you. This publication is not meant to provide legal or account advice. As each situation is different you should consult your own professional advisors for advice based on your specific circumstances.
