The Retirement Income Gender Gap -- Dealing with the Shortfall
TFSA TIPS
1. Comprehensive
Personal Article
Top 10 TFSA Tips
Jaffer Hussain
Consultant
With the introduction of the Tax-Free the effects of tax-free compound 8. If you anticipate that your mar-
Savings Account (TFSA), Canadians growth. If you can’t do it all in ginal tax rate will increase at a
now have more options than ever January, monthly contributions later date, you may benefit by
before to help them save money and can also be effective. saving through your TFSA rather
reduce taxes. Below are the Top 10 than making additional RRSP
5. Ideally, you should use your full
TFSA Tips you should know: contributions. That’s because the
allowable contribution room
tax reduction that your RRSP con-
1. Use your tax-refund wisely. Use each year. But if you don’t, you
tribution may generate now may
the tax refund from your RRSP will accumulate unused TFSA
be less than the tax reduction it
contributions to invest in your contribution room that can be
could generate later on.
TFSA for an optimal combination used at a later date. When possi-
of growth and flexibility. ble and if it fits your financial 9. Make a contribution for your
strategy, strive to maximize your spouse or common-law partner.
2. If you have used-up all of your
TFSA contributions. You can contribute to a partner’s
RRSP contribution room and are
TFSA without affecting your own
looking for additional invest- 6. Contributing to a TFSA during
contribution room. Income attri-
ments, ensure you use-up all of your accumulation years could
bution rules which govern RRSPs
your TFSA contribution room help reduce claw-backs on
do not apply. This can effectively
prior to investing in non-regis- income-tested benefits such as
double your family’s TFSA an-
tered accounts. Old-Age Security and Age Credits
nual contributions if one partner
when it comes time to withdraw
3. Resist the temptation to dip into cannot afford to make such an
retirement funds. Because
your TFSA. The TFSA offers investment.
returns on investment within a
more flexibility than RRSPs and
TFSA are non-taxable, they will 10.Get expert help. In most cases,
therefore there are fewer barriers
not be included as part of your the TFSA should complement
to discourage an individual from
net income, potentially saving your current retirement strategy,
accessing the money. Remember,
you money over time. not be the primary focus. To find
the longer your investments sit
out what’s the best strategy for
uninterrupted, the longer you 7. Unlike RRSPs, there is no age
you contact an Investors Group
may benefit from the positive ef- limit on making contributions
Consultant.
fects of tax-free compound to a TFSA. In fact, you can
growth. Discipline and a clear contribute well into your retire-
objective are essential when in- ment years, helping you save for
vesting within a TFSA. short-term goals like that dream
vacation, a new car or even home
4. Procrastination can be costly, so
renovations. The income gener-
make your TFSA contribution
ated from investments in your
early in the year. The sooner you
TFSA is tax-free, therefore it will
put your money into a TFSA, the
not affect your federal income-
sooner you stand to benefit from
tested benefits such as OAS or
Age Credits.
