Why should you invest in a TFSA account?
- As of 2020, if you were at least 18 in 2009, your contribution room would be $69,500 – a significant amount!
- You can contribute anytime you want – there is no annual deadline for tax purposes like with an RRSP.
- Flexibility – You can withdraw money from your TFSA at any time, for any reason. Just be careful about when you re-contribute
- You don’t have to be earning income in order to contribute to a TFSA, so if you are a stay-at-home parent, retired, or unemployed, you can still take advantage.
- Your spouse or common-law partner is allowed to give you money to contribute to your own TFSA, with no tax implications on their end.
- You can have a TFSA for as long as you like, unlike an RRSP which must convert into a RIFF when you turn 71. Perfect for seniors!
- No lifetime limit on the amount of your annual contributions.
- No effect on your eligibility for government benefits such as Old Age Security, Child Tax Benefit, Guaranteed Income Supplement, Employment Insurance, GST/HST credit, etc.
- Contribution room is never lost – if you’re unable to save the full contribution room limit for the year (for 2020, it is $6000), you can carry this amount forward and use it in future years