How Much Do You Know About a Tax-Free Savings Account (TFSA)? – Let a TSG Financial Planner Walk You Through the Benefits

Today’s economy requires making sound financial decisions. Saving and investing for retirement is one of those choices. The sooner you start, the better position you will be in later. Canadians who utilize a Registered Retirement Savings Plan (RRSP) understand that they are making long-term plans for their Golden Years. What about savings for short-term goals, such as a car or a home or even to supplement an RRSP? A Tax-Free Savings Account (TFSA) can propel you further in your financial goals.

Understanding the benefits of utilizing a TFSA helps you make the best decision for you, your family, and your future. If you are already contributing fully to an RRSP, you can use a TFSA to provide tax-free cash and delay paying taxes on your retirement. As you age, you expect to make more money, which puts you in a higher tax bracket. Since contributions to a TFSA are already taxed; you do not get taxed again when you make a withdrawal. Opening an account is straightforward when you talk with a TFSA issuer such as Thomson, Schindle, Green Insurance, and Financial Services.

Learn the Basics of a Tax-Free Savings Account for Financial Planning

Here some of the basics of a TFSA:

  1. What is a TFSA: To help Canadians set aside tax-free funds for short and long-term goals, the government established the Tax-Free Savings Account program in 2009. A couple of points to keep in mind are:
    • Contributions are not tax deductible
    • Contributions and account earnings are tax-free
    • Types of accounts include deposit, annuities, and trusts
  2. Who Can Open a TFSA: If you are 18 years of age or older and have a valid Social Insurance Number (SIN), you can open an account. Even non-residents of Canada may be able to open a TFSA under certain conditions.
  3. How You Can Open Your TFSA: Opening your account is as simple as contacting your bank, credit union, or an insurance company and providing them with your SIN and date of birth.
  4. Making Contributions: You can have more than one account, but contributions are limited to your available TFSA contribution room. The contribution room for participants is the maximum amount you can put into your account each year and can accumulate based on your annual deposits.

For more detailed information, check out this guide from the Government of Canada. You can also read more on TSG’s website. We first wrote about TFSAs here.

Reliable Financial Planning Advice from Alberta’s Trusted Broker

Prepare for future purchases and even retirement when you consider maximizing a TFSA. The professionals at TSG Insurance offer more than just insurance quotes. We provide financial planning services for Albertans residing in Calgary, Brooks, and Medicine Hat, including helping you set up TFSAs.

Call us toll-free at 800-830-9423 to book an appointment with our licensed professionals at one of our convenient locations to open your TSFA. You can also contact us online for a free quote, and we will respond as quickly as possible.