We’ve looked at Term Deposits and RSPs and some of the features of each that you should consider when choosing how to handle your savings and investments. Today, we’ll zero in on Tax Free Savings Accounts and how financial planners can assist you in choosing the investments that are best for you.
Tax Free Savings Account (TFSA)
A Tax Free Savings Account (TFSA) plan was instituted by the Canadian government in 2009 to help Canadians save money for their retirement or to just save money for a future expense like a down payment on a home, education funding or even a family vacation. This one is slightly different than an RSP in that the taxes on these funds have already been paid. The best part of a TFSA is that any income earned off the investment is tax free. So, if you make an additional $1,000 in interest from your TFSA, that money is not taxable, even when you withdraw it from the TFSA.
Again, the government sets the contribution limits on these with annual limits being anywhere from $5,000 to $5,500 in most recent years. These annual contribution limits carry over year-over-year giving you a contribution limit that might be different than your neighbour, depending on how much you’ve already invested in a TFSA, and how many years you’ve had the opportunity to contribute to a TFSA after you’ve turned 18.
There are too many options to outline fully in this blog, but a TFSA can be anything from a zero risk, low interest, guaranteed investment fund to a mutual fund style investment that should match your risk tolerance, providing you with the possibility to earn even more interest. Connect with us at Encompass Credit Union or PlanWright Financial at 1-877-842-1774 to set up an appointment to talk to one of our expert staff. Or, if you’re ready and know what you want, you can open up a Term Deposit or daily interest style TFSA completely online!
Financial Planning and Investing
At our wholly-owned subsidiary, PlanWright Financial (www.planwright.ca), we can help you choose the services that are best for you. PlanWright offers estate planning, education planning, succession and retirement planning, insurance options as well as investment planning.
Each person and family is different and their needs can be very different. Because of that, it makes the most sense to connect with one of our expert staff members to help you create a plan that is customized to suit your needs. Financial planning and investing is a complex process and it’s great to have our experts to help you navigate the waters. Maybe you have a few thousand dollars that you’d like to put into a mutual fund that might be slightly higher risk, but with the potential for much higher interest and reward. Or maybe you have a significant amount of funds that you want to grow for you and your family’s future. We can help you with either of these options. Check out our team and make an appointment to meet with them today! Email: email@example.com or call us at 780-842-1370 or use our toll free number 1-877-842-1774.