Archive for Retirement Savings

TFSA Contribution Rules




According to the Government of Canada, the Tax-Free Savings Account (TFSA) program began in 2009. It is a way for individuals who are 18 and older to set money aside tax-free throughout their lifetime.

Contributions to a TFSA are not deductible for income tax purposes. Any amount contributed as well as any income earned in the account (for example, investment income and capital gains) is generally tax-free, even when it is withdrawn. Administrative or other fees in relation to TFSA and any interest or money borrowed to contribute to a TFSA are not deductible.


TFSA Limits for 2018

If you have been eligible to contribute to the TFSA since its inception in 2009, it means that in 2018, you will have a total contribution room of $57,500. You can invest up to $57,500 and not pay any taxes on the income earned on your investment.

You will accumulate TFSA contribution room for each year even if you do not file an income tax and benefit return or open a TFSA. Government of Canada

The annual TFSA dollar limit for the years 2009, 2010, 2011 and 2012 was $5,000.
The annual TFSA dollar limit for the years 2013 and 2014 was $5,500.
The annual TFSA dollar limit for the year 2015 was $10,000.
The annual TFSA dollar limit for the year 2016 was $5,500.
The annual TFSA dollar limit for the year 2017 is $5,500.

Your annual TFSA contribution limit is $5,500 per year. The TFSA annual room limit will be indexed to inflation and rounded to the nearest $500. (Hence $57,500 since inception)

Unused contribution room can be carried forward indefinitely and if you choose to withdraw funds from your TFSA in any particular year, the amount withdrawn can be re-contributed in the following year.
If you over-contribute into your TFSA your extra contribution will be charged a 1% penalty tax per month, until it’s removed.



TFSAs are excellent for younger savers or those just entering the workforce and starting with a lower salary, also for retirees in a high tax bracket in retirement or those over the age of 71 wanting to invest. For some, it may make more sense for them to invest their savings in a TFSA rather than an RRSP.

Don’t wait for retirement to enjoy life !!