This is good news for those that want to find ways to save for their future without the concern of future/deferred taxes. Please see what Jay Llave from Creative Planning Financial Group has to say on this matter. This information does pertain to Canada. For those outside of Canada you need to find out what changes in financial policy are happening that can positively impact you!

Come 2011, you will be eligible to contribute an additional $5,000 to a
Tax-Free Savings Account (TFSA), bringing your cumulative total to $15,000 since the account was introduced. That $15,000 is a substantial amount of contribution room, which will still grow each year. This creates an opportunity for you to use your TFSA for multiple and substantial goals – no longer just for an emergency fund. Here are three possible alternative uses for your TFSA:

Goal 1: Saving for a specific goal or event with a known date. These goals
could include, for example, paying for a child’s post-secondary education or planning a once-in-a-lifetime trip. Your savings could be invested in bonds or Guaranteed Investment Certificates that come due as the occasion
approaches. Withdrawal is tax-free.

Goal 2: Saving for retirement with dividends. The Dividend Tax Credit is
wasted within a Registered Retirement Savings Plan (RRSP) or Registered
Retirement Income Fund (RRIF), since all income will be taxed at your
marginal rate when you withdraw it. However, dividend-earning stocks and
dividend mutual funds held within your TFSA will provide completely tax-free income in retirement to complement your RRIF. In addition, you can reinvest dividends on a tax-free basis along the way.

Goal 3: Generating a substantial capital gain. Higher-risk investments have
the potential to generate large capital gains, which will be tax-free within
your TFSA However, remember that there’s no capital loss deduction either.

These are just some of the many ways you might use your TFSA as contribution room grows. We can help you ensure that you’re maximizing the use of this excellent savings vehicle to reach your goals.

Best regards,

Jay F. Llave
“Create and Protect Wealth”
Insurance and Financial Advisor
Creative Planning Financial Group
(416) 487-5210 ext. 5317
Our BLOG

Tags: , ,




logo

Share Your Thoughts
with sandra@2bempowered.com



One Response to “Laws Changing in 2011:Tax-Free Savings Account (TFSA) in Canada”

  1. tax free savings book | My book blog on April 14th, 2011 2:47 pm

    […] Laws Changing in 2011:Tax-Free Savings Account (TFSA) in Canada … Nov 25, 2010 … This is good news for those that want to find ways to save for their future without the concern of … […]

Comments

Leave a Reply