💰Maxing out your TFSA can result in tax-free withdrawals, providing more income during retirement.
📈Contributing to a TFSA allows for tax-free growth of investments over time.
🔍Investors can enjoy a wider range of investment options within a TFSA compared to an RRSP.
🎯Maxing out your TFSA first can provide greater flexibility in using the funds for short-term goals.
🏦TFSAs can be an effective tool for creating a tax-efficient retirement income stream.
Why should I prioritize maxing out my TFSA before contributing to an RRSP?
—Maxing out your TFSA first can provide tax-free withdrawals during retirement, giving you more income compared to an RRSP.
What are the benefits of investing in a TFSA?
—Investing in a TFSA allows for tax-free growth of investments, a wider range of investment options, and greater flexibility in using the funds for short-term goals.
How much can I contribute to my TFSA each year?
—The annual TFSA contribution limit is currently $6,000, but this amount may change in the future.
Can I have both a TFSA and an RRSP?
—Yes, you can have both a TFSA and an RRSP. However, it is important to consider your financial goals and tax implications before deciding on the best approach.
What happens if I contribute more than the TFSA limit?
—Contributing more than the TFSA limit can result in penalties and taxes. It is important to stay within the annual contribution limit to avoid these consequences.
00:00Many financial advisers recommend maxing out your TFSA before contributing to an RRSP due to a tax loophole.
00:45In a TFSA, there's no deduction or rebate, but the contributions are made with after-tax dollars.
01:09After 30 years of conservative investments, a TFSA can result in around $270,000, while an RRSP may have around $350,000.
01:27With a TFSA, the tax rebate doesn't need to be paid back, resulting in more income during retirement.
01:42TFSA withdrawals are non-taxable and don't count as income, making individuals eligible for more benefits.
