TAX-FREE SAVINGS ACCOUNT (TFSA)
- Allows all of your investments to grow tax-free throughout their lifetime
- Any Canadian resident age 18 or older with a Social Insurance Number can open a TFSA
- You can carry forward unused contribution room indefinitely
- There is no tax deduction for contributing
- The returns your investments generate (interest, dividends or capital gains) are completely tax free
- The No-Fee Tradex TFSA allows members to invest in any of the three Tradex Mutual Fund options, or our Tradex Investment Savings account
- The Canada Revenue Agency will track your contribution room and report this amount through the “My Account” function on the CRA web site.
Annual contribution limits:
2009–2012 | $5,000 |
2013-2014 | $5,500 |
2015 | $10,000 |
2016-2018 | $5,500 |
2019-2022 | $6,000 |
2023 (indexing to be confirmed) | $6,500 |
Total | $88,000 |
TFSA OR RRSP?
This table illustrates the after tax return of $36,500 of income earned by an individual who invests for a 25 year period, assuming a 5% rate of return. This example depicts the result of taxation at the same rate, at a lower rate, and at a higher rate during an individual’s retirement years versus their working years.Same tax rate: RRSP and TFSA are identical and no preference should be given to one over the otherLower tax rate in retirement: RRSP is preferableHigher tax rate in retirement: TFSA is preferable
Still not sure which option is best for you? Please contact Tradex to discuss in greater detail which option is best for your individual needs.