The Tax-Free Savings Account (TFSA) - Prospecting Letter

In 2009 Canadians were introduced to a new tax-exempt way to save and invest: the Tax-Free Savings Account (TFSA). What you may not be aware of is the exceptional flexibility that this new account offers in addition to tax savings. Many are calling it the most attractive government savings program since the introduction of the Registered Retirement Savings Plan (RRSP). Keep reading to find out more about this good news, and what the TFSA can do for you.

If you are a Canadian resident aged 18 years or older, you can open a TFSA that lets you save and invest without being taxed on interest or investment earnings – so you get to keep 100% of what you've earned. You can contribute up to $5000 per year to start, and unused contribution room is carried forward indefinitely. The TFSA can hold any asset that is RRSP eligible, such as mutual funds. With a mutual fund TFSA, you’ll benefit from outstanding investment management as an added bonus to potential tax-free performance gains.

Withdrawals from a TFSA can be made tax-free any time of the year for any reason, and you don’t lose your contribution room – the amount withdrawn gets added to your unused contribution room the following year. Moreover, withdrawals won’t affect federal income-tested benefits like Old Age Security or the Child Tax Benefit.

That’s just a taste of what awaits you with the TFSA. While RRSPs are mainly intended for retirement, TFSAs are like an RRSP for everything else in your life. Easy access, tax efficiency and exceptional flexibility – there’s a lot to like, whatever your timeline or saving objectives. It’s a great way for Canadians of all ages, income levels and investing needs to make the most of their savings while trimming their taxes!

Find out more about the TFSA. Come see us today, and we will show you how to best integrate a TFSA into your overall financial plan. If you have any questions about the benefits of a TFSA or would like to set up a meeting, please do not hesitate to contact us.