Weekend Reading – TFSA contribution room hike and great blogs

Earlier this week, the amount Canadians can stash away each year in their tax-free savings account (TFSA) increased by $500.  Starting January 1, 2013, the federal government now allows us to contribute $5,500 in our TFSA each calendar year.  You might recall when this great account was introduced in 2008 the federal government said it intended to index the contribution limit to inflation in $500 increments. Well, they made good on their promise.  Here is a refresher about this account:

  • Any adult Canadian can open a TFSA and use it for a range of investments.
  • All interest, dividends, capital gains and income earned is tax-free.  Any money contributed to a TFSA has already been taxed so it doesn’t get taxed again.
  • Unused contribution room is carried forward indefinitely.
  • Spouses can contribute to each other’s TFSAs.
  • You can have multiple TFSA accounts at different financial institutions BUT it is up to YOU to keep track of your contributions each calendar year.  The government will know if you go over the limit and they will ding you an over-contribution fee.

Remember – whatever investments are allowed in an RRSP account are also allowed in TFSAs – so make the most of it!

Larry Swedroe wondered if we can predict stock market returns over the long term.

Andrew Hallam said he loves it when the stock markets tumble.

Million Dollar Journey shared some tips on being successful with your online education.

Retire Happy offered some harsh realities of investing.

Big Cajun Man shared some things to look for when house shopping.  A modest price is definitely one of them!

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16 Responses to "Weekend Reading – TFSA contribution room hike and great blogs"

  1. Hey Mark,
    Great News about the TFSA for everyone. I still have a pile of room to dump money in which I plan to do shortly. What do you say RRSP first or TFSA as I have considerable room in both? I don’t invest on my own (one day maybe) so I just invest through an advisor. Thanks for the mention mate. Mr.CBB

    Reply
    1. I say ALWAYS try and max out the TFSA.

      Regarding the RRSP, it depends, since the objective of the RRSP after all is tax-deferral. So, if you’re in a high tax-bracket now, it might make sense to use it and max it. For low-income earners, it makes no sense to use it before the TFSA is maxed out.

      Reply
  2. I’m working harder this year to get some funds into the TFSA. Paying down the mortgage was always my priority before it was paid off because I had locked in at a fairly high rate. I like the guaranteed tax free returns of paying down debt.

    Thanks for mentioning my post on Netflix!

    Reply
  3. One of the things I love about TFSA is that the contribution room is not dependent on your income. One of the things I hate about TFSA is that dividends from US stocks are subject to withholding taxes. The CRA and the IRS should do something about it. In any cases, TFSA is a great wealth creation tool. Happy week-end everyone!

    Reply

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